Kerjaya Prospek Group Bhd - Another Step Into Data Centre Infrastructure
Fri, 24-Jul-2026 07:32 am
by Research Team • Apex Research

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KERJAYA (7161)

Target Price (RM)

3.34

Recommendation

Buy

·   KERJAYA has secured a RM52.5m contract for the execution and completion of civil, structural and basic low-voltage mechanical and electrical works in the Klang Valley.

·   Assuming a PAT margin of 6%, the contract is expected to contribute c.RM3.2m (or 1.3% of FY26F PAT) over its c.5.5-month tenure.

·   Expect KERJAYA to remain resilient moving forward, underpinned by its sizeable c.RM4.8bn outstanding order book.

·   Maintain BUY with an unchanged TP of RM3.34, based on 15.0x PE applied to a FY27F EPS of 23.3 sen, alongside a three-star ESG rating.

 

Secured RM52.5m Data Centre-Related Sub-Contract. KERJAYA’s wholly-owned subsidiary, Kerjaya Prospek (M) Sdn Bhd, has accepted a letter of award from a customer for a fixed lump sum sub-contract valued at RM52.5m. The scope covers the execution, completion, testing and defect rectification of civil, structural and basic low-voltage M&E works for the proposed construction of a new 275-kilovolt consumer landing station for a data centre located in the Klang Valley. Works commenced on 23 July 2026 and are slated for completion by 9 January 2027, a duration of approximately 5.5 months.

 

Our View. We view this contract award positively, as it provides an additional stream of revenue over the next year. We assume a 6% PAT margin for this particular project, lower than the c.10% margin typically assumed for the Group's core residential jobs, likely reflecting the sub-contract nature of the works and a more competitive third-party bidding environment. On this basis, the contract could contribute approximately RM3.2m in PAT over its 5.5-month tenure, equivalent to roughly 1.3% of our FY26F PAT forecast of RM245.2m. We see this contract win as consistent with the Group's target of a broadened push into infrastructure-related segments spanning industrial, data centre and commercial projects, which should help diversify KERJAYA's revenue base beyond its traditional core of high-rise residential construction and related-party jobs. Execution risk remains manageable given the relatively short contract duration and the Group's established track record in structural and M&E works.

 

Outlook. This latest award follows a run of substantial contract wins in 1H26, including the RM529.3m Bukit Tunku residential job and the RM488.4m AVEA contract at Andaman Island, Penang. With this RM52.5m addition, the outstanding order book now totals c.RM4.8bn, sustaining strong medium-term earnings visibility. Separately, KERJAYA's tender pipeline stands at c.RM2.0bn, though this remains largely weighted towards residential development and related-party jobs (including from KPPB and E&O) rather than third-party infrastructure work. The data centre-related sub-contract continues to stand out as a useful diversification data point, and it remains to be seen whether the Group's tender book increasingly reflects its stated ambition of a higher external job mix, particularly in industrial, data centre and commercial segments. KERJAYA's recent Penang land bank moves, the 49% stake in Aspen Vision Land and full ownership of Tanjung Bungah Development, should also continue to underpin a steady flow of related-party replenishment alongside such third-party wins.

 

Earnings Revision. We make no changes to our earnings forecasts as this contract award falls within our FY26 orderbook replenishment assumption of RM2.5bn.

 

Valuation & Recommendation. We maintain our BUY recommendation on KERJAYA with an unchanged TP of RM3.34, based on a 15.0x PE applied to a 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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