Rakuten Trade expects Kerjaya Prospek to pay 2.3 sen and 2.7 sen in dividends for FY2023 and FY2024

KUALA LUMPUR (March 23): Rakuten Trade has a “buy” rating on Kerjaya Prospek Group Bhd at RM1.17 with a target price of RM1.70 and said it expects Kerjaya’s FY2023 and FY2204 earnings to improve by 23.5% and 20.0% to RM139.2 million and RM167.0 million, buoyed by higher revenue recognition.

In an investment idea note on Thursday (March 23), Rakuten Trade vice president of research Thong Pak Leng said the company has two property development projects with combined gross development value of RM630 million.

He said construction on these projects has started, with completion expected in 1HFY2024.

Thong said that currently, Kerjaya has 36 ongoing projects, notably Maya Bay Residences Gamuda Land (T12) SB, VIVO Aspen Vision City SB, Bloomsvale Mixed Commercial Development-KP Property SB, Conlay 491 Patsawan Properties SB and Astrum Ampang Nikmat Merpati SB.

He said the company has an outstanding construction orderbook of RM4.7 billion, providing earnings visibility over the next two to three years.

“Based on [a] historical payout ratio of 20%, we expect Kerjaya to pay [a] dividend of 2.3 sen and 2.7 sen for FY2023 and FY2024 [respectively], translating into [a] yield of 1.9% and 2.3% respectively.

“The company’s balance sheet is strong with net cash of RM245 million as at FY2022. Our ‘buy’ recommendation is premised on: i) innovative construction solutions and efficient cost structure that result in above-average profit margins; ii) hands on management team with a proven track record of successful execution; and iii) the ability to consistently win external jobs,” Thong said.