Kerjaya Prospek Group’s (KPGB) 3QFY23 core net profit rose 7.1% QoQ, owing to the better performance of its construction and property divisions. Its construction division saw 11.5% QoQ improvement due to progressive billings whereas its property division chalked its first contribution in 5 quarters upon sales recognition from The Vue @ Monterez project (which was officially launched in 3QFY23). YTD, KPGB’s full-year core net profit is within ours but lower than streets’ estimates, accounting for 74.1% and 68.8% respectively. That aside, KPGB also reported the discontinuation of KL48 job worth RM404.4m (awarded on June 12, 2023). As such, our FY23 orderbook replenishment assumption is now lowered by 24% to RM1.3bn, after factoring the job cancellation. YTD new wins represent 91% of our new RM1.3bn FY23 orderbook replenishment assumption. All told, our FY23-25F forecast is revised downwards by 3.6% on average per annum post billings adjustments. KPGB share price has risen 28.9% since our initiation and given the limited upside potential, we downgrade our rating on KPGB to Neutral with a lower SOP TP of RM1.52 (previously RM1.63) due to the changes made to our forecasts. Also, KPGB has proposed a third interim dividend of 2.0 sen during the quarter, bringing YTD dividends to 6.0 sen.
Source: PublicInvest Research - 22 Nov 2023
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