Kerjaya Prospek Group Bhd - Steady Stream of Wins Sustains Earnings Outlook
Wed, 12-Nov-2025 07:45 am
by Research Team • Apex Research

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KERJAYA (7161)

Target Price (RM)

2.34

Recommendation

Hold

  • KERJAYA has secured two related-party construction contracts worth a combined RM197.7m.

  • Assuming a PBT margin of 11%, the two contracts are expected to collectively contribute c.RM21.7m (or 8.4% of FY25F PBT) over the next 3 financial years.

  • Year-to-date, total contract awards stand at RM1.2bn across 9 projects, boosting the outstanding order book to RM3.7bn (2.0x FY24 revenue).

  • We maintain our HOLD recommendation with an unchanged TP of RM2.34, based on a 15.0x FY26F EPS of 15.5 sen, along with a three-star ESG rating.

 

Secured Two Construction Contracts Worth a Total of RM197.7m. KERJAYA announced that the Group has secured two related-party construction contracts collectively valued at RM197.7m.

 

First Contract Awarded to PBSB. Permatang Bakti Sdn Bhd (PBSB), a wholly-owned subsidiary of KERJAYA, received a letter of award from Serta Usaha Sdn Bhd (SUSB), a subsidiary of Kerjaya Prospek Property Berhad, for the construction of a 39-storey serviced apartment in Shah Alam, Selangor. The contract carries a fixed lump-sum value of RM100.2m. Work is slated to commence on 17 Nov 2025 and is expected to be completed within 34 months from the commencement date.

 

Second Contract Awarded to KPM. Kerjaya Prospek (M) Sdn Bhd (KPM), another wholly-owned subsidiary of KERJAYA, has secured a contract from Tanjung Pinang Development Sdn Bhd (TPD), an indirect subsidiary of Eastern & Oriental Berhad, for the construction of 5 canal bridges on reclaimed land at Pulau Andaman, Penang. The fixed lump-sum consideration amounts to RM97.5m, with the project scheduled to start on 24 Nov 2025 and span 33 months.

 

Our View. We view the latest contract wins positively, though they do not come as a surprise given that more than half of KERJAYA’s existing order book is derived from related-party projects. Assuming a PBT margin of 11%, the two contracts are expected to collectively contribute c.RM21.7m (or 8.4% of FY25F PBT) over the next 3 financial years. Year-to-date, total contract awards stand at RM1.2bn across 9 projects, boosting the outstanding order book to RM3.7bn, equivalent to 2.0x FY24 revenue. These wins further enhance the Group’s earnings visibility and reaffirm the sustained momentum in its contract flows.

 

Earnings Revision. No revision to earnings as these contracts fall within our order book replenishment assumption for FY25.

 

Valuation & Recommendation. We maintain our HOLD recommendation on KERJAYA with an unchanged TP of RM2.34, based on assigned 15.0x 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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