KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Analysts have upgraded their target price and earnings forecast for Kerjaya Prospek Group Bhd following the company's recent RM293 million construction contract win.
Kerjaya Prospek announced that its wholly-owned subsidiary, Kerjaya Prospek (M) Sdn Bhd, secured a building project contract in Batu, Kuala Lumpur from Mega Legacy (M) Sdn Bhd, a subsidiary of UEM Sunrise Bhd, valued at RM292.8 million. This latest contract win brings the company's outstanding order book to RM4.7 billion, which translates to a healthy 3.2 times cover of its 2023 revenue, providing solid earnings visibility for the next four years, according to Philip Capital Research.
Philip Capital Research expects the new project to contribute a total of RM29 million profit after tax and minority interests (PATAMI) across 2025-27, assuming a group blended profit margin of 10%. With this win, Kerjaya Prospek has achieved a year-to-date (YTD) contract win of RM1.5 billion, meeting both management’s and analysts’ previous target for 2024.
Looking ahead, Philip Capital expects Kerjaya Prospek to secure another construction contract valued around RM100 million from KPPROP's upcoming Shah Alam project, with an estimated gross development value (GDV) of RM175 million, slated for launch in the first quarter of 2025.
The research house has revised its 2025-26 earnings forecast upward by 2–3% to reflect a higher order book replenishment target of RM1.8 billion for 2024. Following this earnings upgrade, the target price has been raised to RM2.65 (up from RM2.60), with a "Buy" recommendation maintained. Analysts remain optimistic about Kerjaya Prospek’s earnings prospects, citing robust contract flows from E&O and KPPROP, as well as ongoing industrial-related tender opportunities, including several data center and semiconductor jobs with a combined tender value of RM3 billion.
TA Securities also highlighted the significance of this latest contract win, marking it as the eighth contract secured by Kerjaya in 2024, bringing its total YTD new job wins to RM1.54 billion. This achievement represents 96.7% of the initial FY24 new job win assumption of RM1.6 billion. Consequently, TA Securities has revised its FY24 order book replenishment assumption upwards from RM1.6 billion to RM1.8 billion, reflecting strong order book replenishment observed in the first nine months of FY24.
As a result, TA Securities has adjusted its earnings estimates for FY24/25/26 upwards by 2.5%, 2.3%, and 2.8%, respectively. Following this revision, the target price for Kerjaya Prospek has been increased to RM2.79 (up from RM2.73), based on 18 times CY25 EPS and a 3% ESG premium, given their 4-star rating.
While analysts remain bullish on Kerjaya Prospek, they also note potential downside risks such as lower-than-expected order book replenishment and deteriorating project margins.
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