Kerjaya Prospek Group Bhd - New Partnership Unlocks Fresh Growth Avenues
Wed, 20-May-2026 07:33 am
by Tan Wai Wern • Apex Research

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KERJAYA (7161)

Target Price (RM)

3.10

Recommendation

Buy

  • KERJAYA clinched a RM174.2m building works contract for the construction of a service apartment in Seremban, commencing on 1 June 2026.

  • Assuming a PBT margin of 13%, the contract is expected to contribute c.RM22.6m (or 7.4% of FY26F PBT) over FY26F-FY29F. 

  • Expect KERJAYA to remain resilient moving forward, underpinned by its sizeable RM4.3bn outstanding order book and RM2.0bn tender pipeline.

  • Maintain BUY with an unchanged TP of RM3.10, based on 15.0x PE applied to FY27F EPS of 20.6 sen, alongside a three-star ESG rating.

     

Secured RM174.2m Service Apartment Construction Project. KERJAYA has secured a RM174.2m contract for building works related to a serviced apartment development in Seremban, Negeri Sembilan. The contract was awarded by RB Land Sdn Bhd, a subsidiary of IJM Land Berhad. The project comprises a 44-storey serviced apartment tower featuring retail units, private offices, a six-level parking podium and supporting facilities. Construction is scheduled to commence on 1 June 2026, with completion targeted within 35 months. Notably, this marks the Group’s maiden contract award from IJM Land.

 

Our View. We view the latest contract award positively, asit represents KERJAYA’s fourth contract secured in FY26, further reinforcing earnings visibility over the medium term. Based on our estimated 13% PBT margin, the project is expected to contribute c.RM22.6m in PBT over its 35-month duration, equivalent to 7.4% of our FY26 forecast. We believe execution risk remains manageable given the Group’s well-established track record and strong execution capabilities in high-rise residential developments, which continues to form its core area of expertise. This award also reflects the Group’s ability to secure projects from new reputable clients, after securing its previous contract from Sena Letrik (M) Sdn Bhd for the construction of a private hospital in Seremban 2, potentially opening the door for further collaboration opportunities going forward. Following this latest win, KERJAYA’s YTD contract wins have risen to RM976.5m, bringing its outstanding order book to a robust RM4.3bn.

 

Outlook. We expect KERJAYA to deliver resilient performance despite ongoing macro headwinds, underpinned by its sizeable unbilled order book, which implies a book-to-bill ratio of 1.8x based on FY26F revenue. Looking ahead, replenishment remains supported by a visible pipeline from related parties such as KPPB and E&O. Assuming combined annual GDV launches of RM3.0bn and a 50% construction-to-GDV conversion, the Group could secure RM1.5bn in related-party contracts, providing a solid baseline for order book growth. In addition, the Group is targeting RM2.0bn in new contract wins for FY26, with a greater focus on third-party projects to rebalance its mix to 35% external and 65% internal jobs. This will be complemented by increased participation in infrastructure-related segments, including industrial, data centres and commercial projects.

 

Earnings Revision. We make no changes to our earnings forecast as the award falls within our orderbook replenishment assumption of RM1.8bn for FY26.

 

Valuation & Recommendation. We maintain our BUY recommendation on KERJAYA with an unchanged TP of RM3.10, based on a 15.0x PE applied to FY27F EPS of 20.6 sen, alongside 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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