KERJAYA has accepted a letter of award for a contract worth RM111.8mn from Kerjaya Property Sdn Bhd, a subsidiary of Kerjaya Prospek Property Bhd (KPPROP). The project is principally involved in the construction of 52-storey main building works, including a 42-storey serviced apartment block and an 8- storey elevated carpark in Mukim Setapak.
This project is expected to commence on 16 January 2024 and will take 40 months to complete.
It is deemed a recurrent related party transaction as KPPROP is the property arm of KERJAYA.
Following the fourth construction job secured by KERJAYA in 2024, it brings the total YTD contract wins to about RM337.8mn. As of 16 January 2024, KERJAYA’s total outstanding order book stood at RM4.7bn, equivalent to 4.2x FY22 revenue.
Assuming a gross margin of 14%, the project is anticipated to contribute c.RM10.8mn in net earnings throughout the construction period.
We maintain our earnings forecasts as the job wins are within our FY24 order book replenishment assumption of RM1.6bn.
We reiterate our Sell recommendation with an unchanged TP of RM1.64 based on 13x CY24 EPS.
Source: TA Research - 17 Jan 2024
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