(KPG MK/BUY/RM3.00/Target: RM3.69)

We raise Kerjaya’s target price to RM3.69 as we increase our: a) target PE multiple to 14x (from 11x), and b) 2018/19 EPS estimates by 3.5%/1.9%. We think that Kerjaya deserves a higher PE multiple valuation given its: a) above-average construction margins, b) strong earnings growth (3-year CAGR at 16.5%), c) high orderbook cover of 3.5x and d) net cash position (net cash 23 sen/share). Maintain BUY with a higher target price of RM3.69, implying an ex-cash PE of 13x.

Source: UOB Kay Hian Research - 13 Apr 2017