Secured Two Jobs Totalling RM34.5mn

KERJAYA has clinched two new contracts valued at RM16mn and RM18.5mn from Pixel Valley Sdn Bhd (PVSB) and Greencove Sdn Bhd (GSB), respectively. The following are the details:

Both projects are slated to be completed within 18 months, starting 5 November 2024.

Notably, PVSB and GSB are both wholly owned subsidiaries of Kerjaya Prospek Property Bhd (KPPROP). It is deemed a recurrent related party transaction as KPPROP is the property arm of KERJAYA.

Our View

Given that this is the ninth and tenth construction job secured by KERJAYA in 2024, this brings the total YTD new job wins to RM1,581.3mn. As a result, these two new contracts will lift KERJAYA’s total outstanding orderbook to an estimated RM4.6bn, translating to 3.1x FY23 revenue.

Assuming a 3-year historical net margin of 10%, these projects are expected to generate a net profit of c. RM3.5mn throughout the construction period.

Forecast

We keep our earnings estimates unchanged since the total YTD new job wins account for only 87.9% of our FY24 new job replenishment assumption of RM1.8bn.

Valuation

We reiterate our Buy recommendation on the stock with an unchanged target price of RM2.79, based on 18x CY25 EPS and 3% ESG premium given our 4- star rating. We continue to like KERJAYA for its:- (i) solid earnings visibility, (ii) consistent and robust replenishment of its order book and (iii) the potential growth in industrial property construction leveraging the partnership with Samsung.

Source: TA Research - 24 Oct 2024