PETALING JAYA: Kerjaya Prospek Group Bhd
is poised for a stronger earnings trajectory over the next few years, supported by strong order book replenishment, rising contributions from its property arm and potential upside from data centre-related contracts.
Phillip Research said it expects the group’s momentum to extend into this year.
The research house said in a note yesterday: “We expect Kerjaya to deliver stronger earnings momentum, underpinned by a robust outstanding order book of RM4.4bil, with a potential data centre contract award in the near term serving as a catalyst.”
The research house raised its earnings forecasts for Kerjaya by between 3% and 8% for the period between 2025 and 2027 after factoring in stronger-than-expected contract wins.
The research house pointed out that actual job wins of RM1.8bil for Kerjaya last year had already exceeded its earlier assumptions, prompting a revision of its order book replenishment estimates to RM2bil for this year.
“Management has also guided for a higher internal replenishment target of RM2bil this year,” Phillip Research said.
The research house added that Kerjaya’s construction segment remains the primary earnings driver, anchored by related-party contracts linked to the Aspen and Andaman Island developments in Penang.
It noted that Kerjaya’s order book represents a “healthy 2.4 times cover ratio of 2024 revenue”, providing a stable flow of work.
“At Andaman Island, Eastern & Oriental Bhd’s planned RM1bil gross development value launches annually should sustain construction demand and translate into steady job flows for Kerjaya.
“With land formation works currently only 70% completed, we see further upside from the remaining reclamation and infrastructure packages, with potential contract values estimated at RM300mil to RM500mil, offering additional order-book replenishment,” said Phillip Research.
Beyond residential construction, Kerjaya’s joint venture with Samsung C&T has expanded the group’s exposure to higher-value industrial and data centre projects.
Phillip Research highlighted that one of two major tenders is nearing finalisation and, if secured, could potentially add approximately RM1bil to Kerjaya’s order book, significantly enhancing earnings visibility from this year to 2028.
The research house views this as a meaningful diversification of the group’s project mix, with the potential for better margin quality and longer-tenure projects.
Meanwhile, the group’s property development arm is also gaining traction, as stronger-than-expected revenue recognition from The Vue @ Monterez in Shah Alam and Papyrus @ North Kiara in Kuala Lumpur is expected to support earnings as both projects approach handover in the first half of this year.
The Vue has achieved a 99% take-up rate, while Papyrus stands at 82%, reflecting what Phillip Research described as “resilient underlying demand”.
Phillip Research also expects dividend payouts to remain sustainable, with management targeting an annual dividend of 11 sen to 12 sen, translating into yields of over 4%.
Following the earnings upgrade, Phillip Research is keeping its “buy” call on Kerjaya, raising its target price to RM3.22 from RM2.70, based on a sum-of-parts valuation.
