OVERNIGHT, KERJAYA clinched a RM201.3 mil building works contract from its sister company Kerjaya Prospek Property Berhad (KPPB).
The project involves the construction of two 39-storey residential blocks in Sungai Buloh, featuring integrated recreational facilities, a five-level parking podium and commercial space.
Work is slated to begin on 1 Apr 2026, with a 40-month construction timeline. This represents the Group’s second contract for the project, following the initial RM18.5 mil award in Oct 2024 for site clearance and on-site detention pond works.
“We view this contract favourably as it represents KERJAYA’S first win for 2026, which bolsters the group’s earnings visibility through 2029,” said APEX Securities.
Based on an estimated 13% profit before tax (PBT) margin, the RM201.3 mil project is projected to yield RM26.2 mil in PBT over its 40-month duration.
“We believe execution risks remain minimal, backed by KERJAYA’s robust track record in high-rise developments,” said APEX.
APEX expects KERJAYA to deliver a resilient performance despite macro headwinds, supported by a substantial RM4.4 bil outstanding order book, representing a book-to-bill ratio of 2.4x.
APEX’s channel checks indicate that cost pressures remain manageable, with the earlier impact from the crackdown on overloaded commercial vehicles easing as contractors optimize cargo planning and turnaround times.
“We remain optimistic about the Group’s order replenishment pipeline, particularly from its related-parties, KPPB and E&O,” said APEX.
Assuming an annual combined gross developmental value of RM3.0 bil from E&O and KPPB launches and a 50% construction-to-GDV conversion, KERJAYA is well-positioned to secure RM1.5 bil in related-party contracts, providing a strong floor for orderbook growth.
“We maintain our HOLD recommendation on KERJAYA with an unchanged target price of RM2.67,” said APEX.
APEX further rising material costs, labour shortages and oversupply of high-rise residential projects in the property sector as risks to the company. —Jan 16, 2025
Main image: Kerjaya Prospek
