KUALA LUMPUR: AmInvestment Research has initiated coverage on Kerjaya Prospek Group (KPG) with a Hold rating with a fair value of RM4.14.
The research firm said the the construction player in the niche premium high-rise property segment has upbeat earnings visibility.
It said KPG has completed various iconic building projects with a combined value of RM4bil and has a sound track record.
"Currently, its outstanding order book is valued at RM3.2bil, comprising various types of properties including high-rise properties as well commercial buildings. The company is confident of securing additional job wins in FY18 worth at least RM1bil."
It added that KPG chalks up above-industry margins in the construction industry due to lower operating cost achieved by controlling its administration expenses and adopting an industrialised building system coupled with property, plant and equipment that have been fully depreciated.
"It is well positioned to benefit from the next upcycle in the property market via future launches of its 349 condominium units in Monterez Golf & Country Club, Shah Alam with an estimated GDV of RM200mil.
"Additionally, KPG plans to launch its commercial property in Genting Permai worth RM30mil," it said.
AmInvestment Research projects FY18/19 earnings to grow 12%/14% underpinned by strong outstanding building contrats order book of RM3.2bil, strong earning visibility and its position as a preferred contractor for premium high-rise residential properties.
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