Kerjaya Prospek Group Bhd - Order Book Surges to RM5.0bn on Latest Contract Win
Wed, 24-Jun-2026 07:34 am
by Research Team • Apex Research

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KERJAYA (7161)

Target Price (RM)

3.34

Recommendation

Buy

  • KERJAYA has secured a RM488.4m building works contract for the construction of AVÉA, the second marina-edge residence at Andaman Island, Penang, with works set to commence on 1 July 2026.

  • Assuming a PAT margin of 10%, the contract is expected to contribute c.RM48.8m (or 19.9% of FY26F PAT) over FY26F-FY29F. 

  • Expect KERJAYA to remain resilient moving forward, underpinned by its sizeable RM5.0bn outstanding order book.

  • Maintain BUY with an increased TP of RM3.34 (from RM3.10), based on 15.0x PE applied to a higher FY27F EPS of 23.3 sen, alongside a three-star ESG rating.

 

Secured RM488.4m Residential Development Construction Contract. KERJAYA has been awarded a RM488.4m building works contract for a residential development at Andaman Island, Penang, granted by Persada Mentari Sdn. Bhd., an indirect subsidiary of Eastern & Oriental Berhad. The project involves the execution and completion of the two-phase development comprising two 46 storey serviced apartment towers with a total of 1,080 residential units, together with basement parking, facilities, and commercial space. Construction is scheduled to commence on 1 July 2026, with completion targeted within 42 months.

 

Our View. We view this contract award positively, as it introduces an additional revenue stream over the next three years while bolstering the Group's order book. Assuming a 10% PAT margin, the project is estimated to contribute approximately RM48.8m in PAT over its 42-month tenure, representing 19.9% of our FY26 forecast. Execution risk remains manageable, underpinned by the Group's well-established track record and proven capabilities in high-rise residential developments, which remain its core area of expertise. With this latest win, KERJAYA's year-to-date contract wins have risen to RM2.1bn, pushing its outstanding order book to a healthy RM5.0bn. This translates to a robust book-to-bill ratio of 1.9x based on our FY26F revenue forecast, offering strong earnings visibility. 

 

Outlook. We expect KERJAYA to maintain resilient performance amid prevailing macro headwinds, supported by its sizeable outstanding order book and recurring flow of related-party developments. KERJAYA has also completed its acquisition of a 49% equity stake in Aspen Vision Land Sdn. Bhd., supporting the continued development of Aspen Vision City in Batu Kawan, Penang. Additionally, the Group has acquired the remaining stake in Tanjung Bungah Development Sdn. Bhd., securing full ownership and control of a development project in Tanjung Bungah. These strategic moves are expected to strengthen KERJAYA’s footprint in Penang, complement its existing land bank and development portfolio, and provide exposure to well-located developments with strong connectivity and long-term growth prospects. 

 

Earnings Revision. Following the new contract award, KERJAYA's FY26 order book replenishment has surpassed our initial assumption of RM1.8bn. We have revised our FY26 order book replenishment assumption upward to RM2.5bn, while also raising our FY27 and FY28 assumptions from RM1.8bn to RM2.1bn each. Consequently, our earnings forecasts for FY26F and FY27F have been revised upward by 7.3% and 8.0%, respectively, while we introduce FY28F earnings at RM214.3m.

 

Valuation & Recommendation. We maintain our BUY recommendation on KERJAYA with an increased TP of RM3.34 (from RM3.10), based on a 15.0x PE applied to a higher FY27F EPS of 23.3 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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