Kerjaya Prospek Group Bhd - Contract Awards Recommence with RM87.7m Win
Thu, 06-Nov-2025 09:20 am
by Research Team • Apex Research

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KERJAYA (7161)

Target Price (RM)

2.34

Recommendation

Hold

  • KERJAYA has secured a RM87.7m contract from E&O Express Sdn Bhd for the construction of 133 units of shop lots, 2 electrical substations and 1 compact substation in Elmina, Shah Alam. The contract shall commence on 17 November 2025 and to be completed within 30 months from the commencement date.

  • Following this award, the Group has secured a total of 7 contracts year-to-date, worth RM958.0m in total, lifting the total outstanding order book to RM3.6b (2.0x FY4 revenue).

  • With only 2 months left until the end of FY, we lower our FY25 order book replenishment assumption to RM1.2bn while maintaining our FY26 assumption at RM1.8bn. As such, we have revised our earnings forecasts for FY25F/FY26F/FY27F by -2.7%/-6.5%/-8.0%.

  • We downgrade KERJAYA to HOLD (from BUY) with a lower TP of RM2.34 (from RM2.50), based on a 15.0x FY26F EPS of 15.5 sen, along with a three-star ESG rating.

     

Secured RM87.7m Construction Contract. KERJAYA, through its wholly-owned subsidiary, Kerjaya Prospek (M) Sdn Bhd (KPM), has accepted a letter of award from Eastern & Oriental Express Sdn Bhd (a subsidiary of Eastern & Oriental Bhd) for the execution and completion of 133 shop offices, 2 electrical substations and 1 compact substation in Elmina, Shah Alam for a fixed lump sum contract price of RM87.7m. The project shall commence on 17 November 2025 and to be completed within 30 months from the commencement date.

 

Outlook. We view this development positively as it broadens the Group’s project pipeline and underscores potential contract wins ahead. Assuming a PBT margin of 11%, the contract is expected to contribute c.RM9.6m (3.6% of FY25F PBT) over a 30-month period, supporting earnings through FY28F. With this latest award, the Group has secured 7 contracts year-to-date with a cumulative value of RM958m, lifting its outstanding order book to RM3.6bn, equivalent to 2.0x FY24 revenue.

 

Earnings Revision. Following the new contract award, KERJAYA’s FY25 order book replenishment remains below our earlier RM1.8bn assumption. With only 2 months left until the end of FY, we lower our FY25 order book replenishment assumption to RM1.2bn while maintaining our FY26 assumption at RM1.8bn. As such, we have revised our earnings forecasts for FY25F/FY26F/FY27F by -2.7%/-6.5%/-8.0%, respectively.

 

Valuation & Recommendation. We downgrade KERJAYA to HOLD (from BUY) with a lower TP of RM2.34 (from RM2.50), based on assigned 15.0x P/E multiple to its FY26F EPS of 15.5 sen, along with a three-star ESG rating.

 

Risks. Rising material costs, labour shortages, and high-rise office oversupply in the property sector.

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