KERJAYA has secured its first direct data centre contract, worth RM858.0m, for mechanical, electrical and plumbing (MEP) fit-out works at a data centre in Iskandar Puteri, Johor, awarded by a data centre developer.
Assuming a PAT margin of 5%, the contract is expected to contribute c.RM42.9m (or 17.1% of FY26F PAT) over its c.8-month tenure.
This latest win lifts KERJAYA's total new contract wins for 2026 to a record RM3.2bn, well above the Group's already-raised expectations, and pushes the outstanding order book to a record RM5.9bn.
Maintain BUY with an increased TP of RM3.58 (from RM3.38), based on 15.0x PE applied to a higher FY27F EPS of 23.8 sen, alongside a three-star ESG rating.
Secured RM858m Data Centre Contract. KERJAYA’s wholly-owned subsidiary, Kerjaya Prospek (M) Sdn Bhd, has been awarded a RM858.0m contract by a data centre developer, comprising mechanical, electrical and plumbing (MEP) fit-out works for a data centre located in Iskandar Puteri, Johor. The project is expected to commence in third quarter of 2026 and is targeted for completion within eight months.
Our View. We view this contract win positively,as it provides an additional revenue stream for the Group through FY27. We assume a PAT margin of approximately 5% for this project, the contract could contribute approximately RM42.9m in PAT over its 8-month tenure, equivalent to roughly 17.1% of our FY26F PAT forecast on a full-contract basis. Unlike KERJAYA's earlier RM52.5m data centre-related sub-contract in July 2026, which covered civil, structural and basic low-voltage M&E works, this latest award is a substantially larger, direct MEP-scope contract awarded by a data centre developer – a meaningful validation of KERJAYA's stated ambition to build a genuine presence in data centre construction, rather than a one-off diversification data point. We expect this win to strengthen KERJAYA's credentials and track record in the data centre space, supporting a larger pipeline of similar contracts over time as demand for data centre infrastructure in Malaysia and the region continues to grow.
Outlook. This latest award lifts KERJAYA's total new contract wins for FY26 to a record RM3.2bn, comfortably surpassing the Group's original full-year target of RM2.0bn. The outstanding order book has correspondingly risen to a record RM5.9bn, translating to a book-to-bill ratio of approximately 2.6x based on FY25 revenue, underpinning continued strong earnings visibility over the coming years. This momentum reflects KERJAYA's successful foray into the data centre sector, with this maiden RM858.0m MEP contract marking a significant new growth avenue alongside the Group's traditional Klang Valley, Penang and Johor Bahru residential and related-party pipeline. Together with the Group's recent ES Sunlogy stake and its broader push into M&E engineering and industrial infrastructure work, this data centre win reflects a construction group that continues to diversify both its job mix and its sector exposure, while maintaining a sizeable base of related-party replenishment.
Earnings Revision. Following the new contract award, KERJAYA’s FY26 order book replenishment has surpassed our assumption of RM2.5bn. We have revised our FY26 order book replenishment assumption upward to RM3.5bn, while maintaining our FY27 and FY28 assumptions of RM2.1bn each. Consequently, our earnings forecasts for FY26F/FY27F/FY28F have been revised upward by 2.2%/6.0%/9.3% to RM250.6m/RM300.1m/RM237.1m, respectively.
Valuation & Recommendation. We maintain our BUY recommendation on KERJAYA with an increased TP of RM3.58 (from RM3.38),based on a 15.0x PE applied to a higher FY27F EPS of 23.8 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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