Kerjaya Prospek Group Bhd - Powering into Utility Infrastructure with TNB Paka Award
Fri, 23-Oct-2026 07:24 am
by Research Team • Apex Research

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KERJAYA (7161)

Target Price (RM)

3.75

Recommendation

Buy

• KERJAYA via a consortium in which it holds a 25% participation, has accepted a RM568.2m contract from TNB to establish the PMU 500/275/132/33/11kV Paka GIS in Terengganu, to be completed within 24 months; KPG's share is c.RM142.1m.

• The award lifts YTD FY26 new wins to c.RM3.5bn and the Group's order book to c.RM6.0bn, c.2.7x FY25 revenue, extending earnings visibility to FY29.

• The Group's tender book stands at c.RM2.0bn, while recent wins in data centre MEP works and power infrastructure broaden its reach beyond high-rise building works.

• Maintain BUY with an unchanged TP of RM3.75, based on 15.0x PE applied to a FY27F EPS of 25.0 sen, alongside a three-star ESG rating.

 

Secured RM568.2m TNB substation contract in Terengganu. KERJAYA’s wholly-owned subsidiary, Kerjaya Prospek (M) Sdn Bhd, together with Jati Tinggi Holding Sdn Bhd (a whollyowned subsidiary of Jati Tinggi Group Bhd) and Betapac Sdn Bhd, received a letter of award from Tenaga Nasional Bhd (TNB) on 21 October 2026 through the JTHSB-KPMSB-BSB Joint Venture, an unincorporated consortium, and accepted it on 22 October 2026. The RM568.2m contract covers the execution and establishment of the PMU 500/275/132/33/11kV Paka GIS, a transmission main intake substation in Terengganu, to be completed within 24 months from the commencement date. Rights and obligations are shared 55:25:20 among Jati Tinggi Holding (JTHSB), KERJAYA and Betapac (BSB), giving KERJAYA a 25% participation, or c.RM142.1m of the contract value. The Group expects the contract to contribute positively to earnings for FY2026 to FY2028.

Our View. We view this contract win positively, While KERJAYA's c.RM142.1m share is modest at c.2.4% of its order book, the award marks the Group's entry into power infrastructure for TNB and its first project in Terengganu, extending a diversification that already includes data centre fit-out works. Assuming a 10% net profit margin, KERJAYA's 25% share of the contract could contribute c.RM14.2m in PAT over the 24-month tenure, equivalent to c.5.6% of our FY26F CNP forecast on a full-contract basis. Strategically, this marks KERJAYA's first foray into Terengganu, extending its geographic diversification beyond the Klang Valley, Penang and Johor Bahru, and adds power transmission infrastructure to a growing list of infrastructure-related segments the Group is building a track record in, alongside data centres and industrial works. As a consortium contract with an established partner (JTHSB) and a specialist substation contractor (BSB), execution risk is shared and KERJAYA's effective exposure is capped at its 25% participation, which we view as a sensible way to gain exposure to large-scale power infrastructure work without disproportionate balance sheet or execution risk.

Outlook. KERJAYA's order book now stands at c.RM6.0bn, c.2.7x FY25 revenue, providing earnings visibility through FY29. YTD FY26 new wins of c.RM3.5bn are already well above the Group's initial RM2.0bn target, and include the RM858m mechanical, electrical and plumbing fitout contract for a data centre in Iskandar Puteri, Johor, secured in September 2026, its first data centre job. Its tender book remains healthy at c.RM2.0bn. Beyond construction, the Group's recent 31% stake in ES Sunlogy Bhd adds exposure to mechanical and electrical engineering and renewable energy. Together with continued related-party replenishment from E&O-linked developments, we expect KERJAYA's order book to remain well-supported over FY27–FY28, underpinning continued earnings growth even as the Group's job mix and geographic footprint continue to diversify away from its traditional Klang Valley and Penang residential base.

Earnings Revision. We make no changes to our earnings forecast as the award falls within our orderbook replenishment assumption of RM3.9bn for FY26.

Valuation & Recommendation. We maintain our BUY recommendation on KERJAYA with an unchanged TP of RM3.75, based on a 15.0x PE applied to a higher FY27F EPS of 25.0 sen, alongside a three-star ESG rating.

Risks. Rising material costs, labour shortages, continued reliance on related-party contract awards, and oversupply of high-rise residential projects in the property sector.

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