Kerjaya bagged its fifth contract for FY2020. This brought YTD contract wins to approximately RM1.3bn. Kerjaya’s outstanding order book now stands at approximately RM3.7bn.
This award is for the execution and completion of a temporary coastal protection structure for Phase 2B and part of Phase 2C of reclamation for STP2 project at Tanjung Tokong, Penang. The construction works will take 40 months to complete.
We are positive on the latest contract win, which also comes from familiar client. Importantly, this contract win is very much within Kerjaya’s speciality scope, i.e infra work – and Kerjaya is conducting another infra work for the same client namely STP 2 infra works (lightings and roadworks) worth RM41.5m.
As YTD job wins are still within our FY20 new projects target of RM1.5bn, we leave our estimates unchanged. The company’s current outstanding order-book of RM3.6b provides 3x revenue cover.
We maintain our BUY rating with unchanged TP of RM1.30 based on SOP valuations, implying 12x PE. We remain positive on the company, 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 - 15 Sept 2020
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