BUSINESS

KENANGA RESEARCH MAINTAINS 'OUTPERFORM' RATING ON KERJAYA PROSPEK

07/11/2023 12:25 PM

KUALA LUMPUR, Nov 7 (Bernama) -- Kenanga Research has maintained its “Outperform” rating on Kerjaya Prospek Group Bhd due to its strong earnings visibility underpinned by a sizeable outstanding order book and recurring orders from related companies.

In a note today, the research house said it is positive on the company’s latest contract which brings its year-to-date job wins to RM1.6 billion, which has now exceeded its full-year assumption of RM1.5 billion and surpassed the company’s own target of RM1.2 billion.

"The latest contract win has raised its outstanding order book to RM4.8 billion. We expect this contract’s net profit margin to be 10 per cent. 

“Currently, its tender book stands at about RM1.5 billion-RM2.0 billion comprising building/reclamation jobs from its sister companies, MNC industrial warehouse/factories via its joint-venture with Samsung C&T Corp, and third-party building jobs in the Klang Valley,” Kenanga Research added.

The research outfit has raised its forecast net profit for Kerjaya Prospek in the financial year ending Dec 31, 2023 (FY2023) and FY2024 by 1.0 per cent and 6.0 per cent, respectively, and assumes job wins of RM1.7 billion in FY2023 (against RM1.5 billion previously). 

It also maintained its job win assumption for Kerjaya Prospek of RM1.6 billion in FY2024.

Kenanga Research said it also likes Kerjaya Prospek for its innovative and high-margin formwork construction method, as well as a lean and hands-on management team with a strong execution track record. 

"However, risks to our call include further deterioration in the prospects for building jobs, rising input costs, and liquidated ascertained damages from cost overrun and delays,” it added.

As of 12.20 pm, Kerjaya Prospek’s shares rose one sen to RM1.49, with 1.12 million units traded. 

-- BERNAMA


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