Highlights

Construction Theme in Year 2020

Author: share4u888   |   Latest post: Fri, 24 Jan 2020, 8:58 AM

 

Is Kerjaya Prospek (7161) Winner in Year 2020 ?

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Please refer to below for famous blogger Investology blog for detail introduction of this company.

https://wislearninvestology.blogspot.com/2018/12/kerjaya.html

https://wislearninvestology.blogspot.com/2019/03/kerjaya.html

 

I am not to touch on the background of the company, but i am giving you a hints on the future on this company and how much more it can grow.

Currently Kerjaya hold an unbilled orderbook of 3.8bil, and stock price is RM1.38. Stock price doesn't really move much as you can see from the chart, eventhough company has annoucned secured big contract awarded of almost 1bil just in Jan 2020.

 

But what i am going to share with you is the company orderbook will ballon to over 5bil within this year, with just several contracts coming soon. 

At 3.4bil orderbook, stock price RM1.30

At 3.8bil orderbook, stock price RM1.38

At above 5bil orderbook, what is the future stock price ?

Why i said so ? There are several projects which i am aware of going to launch this year and all this are Related Party Transaction ( mean these contract will be warded to Kerjaya for sure )

GSB new property development worth 800mil
E&O second bridge worth RM200mil
E&O The Peak Residence condominium at Damasara worth RM278mil.
E&O maiden condominium at seri tanjung penang STP 2A. Valie unknown yet.

Added above future contract, the orderbook will balloon to above RM5bil already. This hasn't count in the Government Infratructure Work, and other customer contract award ( like BBCC, EcoWorld...etc ).

 

Let me tell you why you should buy this company stock now  :

  • Net cash company, currently hold ~ 190mil cash on hand. Where you dont have to worry about right issue, private placement or share consolidation like 50 into 1 happened to other company.
  • Possible acquisition, as Datuk Tee held the Quarterly Review with press, he mentioned he is looking into acquisition to deepen and wipen the company revenue.
  • Kerjaya has the highest gross profit margin of ~ 18% among other construction company. Mainly thanks to its net cash status where it dont have to borrow money from banks to purchase the raw material ( cements, steel, worker salary...etc ) or equipments so it can enjoy high profit margin compare to other company.
  • All the Kerjaya customers are branded developer where there is not issue of the billing payment. 
  • Good management team lead by Datuk Tee. Datuk Tee has been the lead the company for past few years and company has been growing from since then. Stock price been up from RM1.xx to above RM3.xx before bonus issue in year 2018. stock price was affected by the PH government cutting government infrastructure spending and then stay stagnent although Kerjaya was not involved in government sector at all.
  • Interest rate cut by Bank Negara will help boost the property sector. This turn out potentially more contract will be awarded to Kerjaya.
  • Government infrastruture spending to pick up in 2020. In fact, in year 2019 Kerjaya as set up a new division to tap into government infrastruture work, however, the development fund from government did not release to market on time in 2019. So in year 2020, there will be double of development fund to be released to market ( one from the 2018 budget announcement and one from 2019 budget announcement ). Mostly all the heavyweight infrustructure work will begin in year 2020. Construction sector will be re-rating by them. As you can see, Gamuda stock price has been moving for past few week. Kerjaya will be benefited on government infrastructure work and improve its orderbook further more.
  • Investor start to collecting the stock as you can see from the daily volume transaction.
  • Company share buyback recently show that company also feel the stock price now is undervalue ( or going to be worth more value in coming future ?? )

Considering above points, i am predicting Kerjaya will presume the growth like before and expecting stock price of above RM2 within this year.

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Labels: KERJAYA

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