Kerjaya Prospek Group Bhd - First contract win of the year
Fri, 16-Jan-2026 08:14 am
by Tan Wai Wern • Apex Research

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KERJAYA (7161)

Target Price (RM)

2.670

Recommendation

Hold

  • KERJAYA has secured a construction contract worth RM201.3m for the construction of two 39-storey apartments with commercial components in Sungai Buloh, Selangor.

  • Assuming a PBT margin of 13%, the contract is expected to contribute c.RM26.2m (or 8.7% of FY26F PBT) over FY26F-FY29F.

  • Maintain HOLD recommendation with an unchanged TP of RM2.67, based on 15.0x P/E multiple applied to its FY26F EPS of 17.8 sen, along with a three-star ESG rating.

 

Secures Construction Contract Worth RM201.3m. Overnight, KERJAYA clinched a RM201.3m building works contract from its sister company Kerjaya Prospek Property Berhad (KPPB). The project involves the construction of two 39-storey residential blocks in Sungai Buloh, featuring integrated recreational facilities, a five-level parking podium and commercial space. Work is slated to begin on 1 Apr 2026, with a 40-month construction timeline. This represents the Group’s second contract for the project, following the initial RM18.5m award in Oct 2024 for site clearance and on-site detention pond works.

 

Our View. We view this contract favourably as it represents KERJAYA’S first win for FY26, which bolsters the group’s earnings visibility through FY29. Based on an estimated 13% PBT margin, the RM201.3m project is projected to yield RM26.2m in PBT over its 40-month duration (representing 8.7% of our FY26F PBT). We believe execution risks remain minimal, backed by KERJAYA’s robust track record in high-rise developments.

 

Outlook. We expect KERJAYA to deliver a resilient performance despite macro headwinds, supported by a substantial RM4.4bn outstanding order book, representing a book-to-bill ratio of 2.4x. Our channel checks indicate that cost pressures remain manageable, with the earlier impact from the crackdown on overloaded commercial vehicles easing as contractors optimize cargo planning and turnaround times. We remain optimistic about the Group's order replenishment pipeline, particularly from its related-parties, KPPB and E&O. Assuming an annual combined GDV of RM3.0bn from E&O and KPPB launches and a 50% construction-to-GDV conversion, KERJAYA is well-positioned to secure c.RM1.5bn in related-party contracts, providing a strong floor for orderbook growth.

 

Earnings Revision. No change to earnings revision as this award falls within our orderbook replenishment assumption for FY26 of RM1.8bn.

 

Valuation & Recommendation. We maintain our HOLD recommendation on KERJAYA with an unchanged TP of RM2.67, based on 15.0x FY26F EPS of 17.8 sen, along with a three-star ESG rating.

 

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

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