Kerjaya Prospek Group Bhd - Hits the Ground Running
Tue, 24-Feb-2026 07:54 am
by Tan Wai Wern • Apex Research

Counter

KERJAYA (7161)

Target Price (RM)

2.67

Recommendation

Hold

  • KERJAYA has secured a construction contract worth RM502.3m for the execution and completion of reclamation and dredging works for Phase 2 of STP2.

  • Assuming a PBT margin of 13%, the contract is expected to contribute c.RM65.3m (or 21.6% 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 Land Reclamation and Dredging Works Contract Worth RM502.3m. KERJAYA has secured a RM502.3m contract from its sister company, Eastern & Oriental Berhad (E&O). The scope includes reclamation and dredging works for Phases 2B and 2C of the Seri Tanjung Pinang (STP2) development, covering approximately 507 acres. The project is scheduled to begin on 11 March 2026 with a 36-month completion timeline. This award is significant as it consolidates the entire STP2 reclamation project under KERJAYA, following the Phase 1 contract win in May 2024.

 

Our View. We view this latest award favourably as it marks KERJAYA’S second win for FY26, significantly strengthening earnings visibility through FY29. At an estimated 13% PBT margin, the project is slated to contribute RM65.3m in PBT over its 36-month tenure, representing a substantial 21.6% of our FY26 forecast. Given the Group's successful execution of Phase 1 of STP2, we see limited execution risk. This win brings YTD awards to RM703.5m and boosts the total outstanding orderbook to a robust RM4.4bn.

 

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. We remain optimistic about the Group's orderbook 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.

Read more details in:

Disclaimer

The report is for internal and private circulation only and shall not be reproduced either in part or otherwise without the prior written consent of Apex Securities Berhad. The opinions and information contained herein are based on available data believed to be reliable. It is not to be construed as an offer, invitation or solicitation to buy or sell the securities covered by this report.

Opinions, estimates and projections in this report constitute the current judgment of the author. They do not necessarily reflect the opinion of Apex Securities Berhad and are subject to change without notice. Apex Securities Berhad has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.

Apex Securities Berhad does not warrant the accuracy of anything stated herein in any manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against Apex Securities Berhad. Apex Securities Berhad may from time to time have an interest in the company mentioned by this report. This report may not be reproduced, copied or circulated without the prior written approval of Apex Securities Berhad.

Market Mover
Settlement Rates
Currency Buy Rates (RM) Sell Rates (RM)
USD 3.874515 3.905813
EUR 4.587974 4.592881
CNY 0.564620 0.565245
HKD 0.495804 0.499311
SGD 3.062969 3.084769