Kerjaya Prospek Group Bhd - Johor Bahru SOHO Win Lifts YTD Contracts to RM2.4bn
Thu, 13-Aug-2026 07:26 am
by Research Team • Apex Research

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KERJAYA (7161)

Target Price (RM)

3.34

Recommendation

Buy

  • KERJAYA has secured a RM223m contract for the execution of main building works for a small office or home office (SOHO) development in Johor Bahru.

  • Assuming a PAT margin of 10%, the contract is expected to contribute c.RM22.3m (or 9.1% of FY26F PAT) over its c.32-month tenure. 

  • The win lifts KERJAYA’s YTD contract wins to RM2.4bn, alongside a sizeable c.RM5.0bn 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 RM223m Johor Bahru SOHO Contract. KERJAYA’s wholly-owned subsidiary, Kerjaya Prospek (M) Sdn Bhd, has accepted a letter of award from Sunway Majestic Sdn Bhd for the construction and completion of main building works at Bandar Johor Bahru, Johor, for a fixed lump sum contract price of RM223m. The development comprises 1,012 SOHO units across two 34-storey towers, comprising 540 and 472 units respectively, together with ten levels of podium parking, two levels of mezzanine commercial space and two levels of facilities. Construction is scheduled to commence on 1 September 2026 and is targeted for completion within 32 months.

 

Our View. We view this contract award positively, as it provides an additional revenue stream for the Group over the next three years. We assume a PAT margin of approximately 10% for this project, consistent with the Group's core high-rise residential and SOHO projects. On this basis, the contract could contribute approximately RM22.3m in PAT over its 32-month tenure, equivalent to roughly 9.1% of our FY26F PAT forecast of RM245.2m. We also note that this marks the Group's third new contract win in Johor Bahru since 2025, reinforcing its growing presence in the southern region and complementing its traditional Klang Valley and Penang footprint. Execution risk is assessed as manageable given the Group's established track record in high-rise residential and SOHO developments.

 

Outlook. This latest award lifts KERJAYA's YTD FY26 contract wins to RM2.4bn, comfortably surpassing the Group's initial full-year target of RM2.0bn, with management noting that the outstanding order book now stands at c.RM5.0bn. This translates to a book-to-bill ratio of approximately 1.9x based on our FY26F revenue forecast, underpinning continued strong earnings visibility over the coming years. This momentum reflects a broadening geographic footprint, with Johor Bahru emerging as a third growth market alongside the Klang Valley and Penang. Together with the Group's recent Penang land bank moves and its expanding exposure to data centre and industrial-related infrastructure work, this Johor Bahru win reflects a construction group that continues to diversify both its job mix and its regional presence, while maintaining a sizeable base of related-party replenishment. 

 

Earnings Revision. We make no changes to our earnings forecasts. However, we highlight that YTD contract wins of RM2.4bn are now tracking close to our FY26F orderbook replenishment assumption of RM2.5bn, with less than five months remaining in the year. Should this pace of contract wins be sustained, there is a reasonable likelihood of a further upward revision to our FY26F and FY27F replenishment assumptions, and consequently our earnings forecasts. 

 

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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