KERJAYA’s 1HFY26 core net profit of RM117.0m (+16.5% YoY) accounted for 47.7% of our FY26F forecast and 46.1% of consensus estimates, which is in line with our expectation.
We expect KERJAYA to continue delivering resilient earnings performance, supported by its sizeable outstanding order book of RM5.0bn, translating to a robust revenue coverage of 2.22x FY25 revenue.
We maintain our FY26F/FY27F/FY28F core net profit forecasts of RM245.2m/RM283.0m/RM217.0m.
Maintain our BUY recommendation with an unchanged TP of RM3.38, based on 15.0x PE applied to FY27F EPS of 22.5 sen, alongside a three-star ESG rating.
Result Inline. KERJAYAreported a 2QFY26 core net profit of RM54.9m (-11.8% QoQ, +0.8% YoY), after adjusting reversal of ECL (-RM11.82m). This brought 1HFY26 core net profit of RM117.0m (+16.5% YoY), accounting for 47.7% of our FY26F forecast and 46.1% of consensus estimates, in line with our expectations, driven by progressive contributions from the core construction and property development segments.
QoQ. Core net profit rose 49.6% QoQ to RM54.9m (1QFY26: RM62.2m), even as revenue declined 9.8% QoQ to RM403.1m amid slower construction and property development billings following the seasonally stronger first quarter. PBT margin expanded to 21.2% (1QFY26: 17.0%), supported by a RM11.82m reversal of ECL and a low-base-driven increase in other income to RM15.7m (1QFY26: RM4.9m).
YoY. Revenue fell 25.3% YoY to RM403.1m (2QFY25: RM539.5m), as construction revenue recognition declined 24.4% YoY to RM355.2m on lower work-in-progress across ongoing projects, while property development revenue fell 31.1% YoY to RM47.4m as The Vue @ Monterez and Papyrus @ North Kiara neared completion. Despite lower revenue, core net profit increased by 0.8% to RM54.9m, mainly driven by prudent cost management and contributions from higher-margin projects.
YTD. 1HFY26 revenue fell 16.0% YoY to RM849.9m as flagship property development projects progressed past their peak billing stages and construction revenue recognition normalised from the prior year's elevated base. Core net profit nonetheless rose 16.5% YoY to RM117.0m, underpinned by margin expansion across the Group's core segments and a 35.2% increase in other income to RM20.6m.
Dividends. The Group declared a second interim single-tier dividend of 3.5 sen per share, with an ex-date of 14 Sep 2026.
Outlook. We expect KERJAYA to continue delivering resilient earnings performance despite prevailing macroeconomic uncertainties, supported by its sizeable outstanding order book of RM5.0bn, underpinned by robust FY26 YTD contract wins of c.RM2.4bn, translating into a book-to-bill ratio of c.2.2x based on our FY25 revenue forecast and providing healthy multi-year earnings visibility. Notably, the Group has secured five new external clients YTD FY26, including IJM Corporation and Sunway Majestic, marking further progress towards its targeted 35% external and 65% internal project mix and reducing reliance on related-party contracts over the longer term. The Group's gross landbank stands at 88 acres, further bolstered by the recent acquisition of three parcels of land totalling 7.4 acres in Jalan Puchong, providing a pipeline of future launches to sustain the division's contribution over the medium term. Subsequent to the quarter, KERJAYA acquired a 30% stake in ES Sunlogy Berhad for a total consideration of RM64.3m, becoming its largest shareholder – a move we view positively as it broadens KERJAYA's exposure to M&E engineering and renewable energy, complementing its own industrial and data centre-related project pipeline.
Earnings Revision. We make no changes to our earnings forecast.
Valuation & Recommendation. We maintain our BUY recommendation on KERJAYA with an unchanged TP of RM3.38, based on a 15.0x PE applied to FY27F EPS of 22.5 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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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.010089 | 4.038209 |
| EUR | 4.662104 | 4.666874 |
| CNY | 0.598052 | 0.598669 |
| HKD | 0.511478 | 0.515075 |
| SGD | 3.148983 | 3.171274 |