Secures RM125.0mn of Building Works

KERJAYA has accepted a letter of award for a contract worth RM125.0mn from Sunrise Alliance Sdn Bhd, a subsidiary of UEM Sunrise Bhd. The award is for the design and build contract works for a proposed phase 2 development project in Taman Equine, Bandar Putra Permai, Selangor.

The project entails the design and build of two blocks of apartments, which comprise 26 storeys and 25 storeys, respectively, a 3-storey commercial unit and a podium, which consists of a 6-storey carpark and common area.

The construction works are expected to commence on 27 September 2023 and will take 29 months to complete from the commencement date.

Our View

This is the sixth construction job secured by KERJAYA in 2023, bringing the total year-to-date contract win to about RM1.1bn. Assuming a gross margin of 14%, the project is estimated to generate RM13.1mn of net earnings throughout the construction period.

Following the job win, KERJAYA’s total outstanding order book now stands at about RM4.4bn, equivalent to 3.9xFY22 revenue.

Forecast

Maintain our FY23 to FY25 earnings forecasts as the job win is within our FY23 order book replenishment assumption of RM1.3bn.

Valuation

Target price is maintained at RM1.50, based on unchanged 12xCY24 earnings. Reiterate Buy on KERJAYA.

Source: TA Research - 1 Sept 2023