• Kerjaya announced yesterday that it has accepted a letter of award for RM203.7 million, through its wholly owned subsidiary, Kerjaya Prospek (M) Sdn Bhd, from Gamuda Land (T12) Sdn Bhd, a wholly owned subsidiary of Gamuda Berhad (“Gamuda”) to undertake construction works in respect of main building works for a proposed residential and commercial development project located at Kuala Langat, Selangor Darul Ehsan, known as Maya Bay Residences, Gamuda Cove.
• We are positive on this development as this is the maiden work Kerjaya managed to bag from a reputable developer, Gamuda..
• We make no change to our earnings forecast as YTD job wins are still within our FY20 new projects target of RM1.5bn
• Maintain BUY with unchanged TP of RM1.30 based on SOP valuations, tagged to 12x PE.

Fourth contract win in 2020

This contract, being Kerjaya’s fourth for 2020, swells the company’s yearto-date contract wins to approximately RM1.2bn. Kerjaya’s outstanding order book now stands at approximately RM3.6bn.

Jobs within specialty

This contract win is very much within Kerjaya’s speciality scope, i.e. highrise development job and has conducted various similar works in its current orderbook. Notably, it is worth to highlight that this is the maiden project for Kerjaya with Gamuda.

Details of the project

The proposed project comprises 3 blocks, of which Block A and B each will encompass 18 storeys of serviced apartments, accommodating 303 units respectively whereas Block C will be a 20-storey serviced apartments consisting of 366 units.

Financial impact

As YTD job wins are still within our FY20 new projects target of RM1.5bn, we leave our estimates unchanged.

Maintain BUY

We maintain our BUY rating with unchanged TP of RM1.30 based on SOP valuations, tagged to 12x PE. We remain positive as Kerjaya’s earnings growth is backed by solid outstanding orderbook of RM5.3b which will provide earnings visibility for the next 3 years. Maintain BUY.

Source: BIMB Securities Research - 2 Sept 2020