Kerjaya Prospek's prospect boosted by strong order book, E&O

KUALA LUMPUR: Kerjaya Prospek Group Bhd's outstanding orders and strong position in the construction sector bodes well for its future prospects, says RHB Research.

The research house, which has a "buy" call on the stock said the group's three new contracts this year brought its wins this year so far to RM385mil, which falls within its RM1bil estimate.

The group's outstanding order book stands at RM3.5bil, which should support its construction income, it said.

"Moving forward, we believe that its new job replenishment ability should allow KPG to enhance earnings and further strengthen its post-pandemic recovery prospects.

"While the rise in steel prices remains a downside risk, KPG’s sturdy balance sheet and net cash position should give it an edge over peers," said RHB.

Meanwhile, the research house expects the redesignation of Datuk Tee Eng Ho as a non-independent non-executive chairman of Eastern & Oriental Holdings Bhd will create further value for both entities.

It said Kerjaya Prospek's strength in value engineering and construction could help property developers such as E&O achieve greater cost efficiency and higher-quality products.

RHB has a target price of RM1.71 on Kerjaya Prospek, which represents 38% upside with about 3% yield.
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