KERJAYA: Strong Earnings Outpace Forecasts on Operational Strengths, Outlook Positive

A leading construction and property development group, Kerjaya Prospek Group (KPGB), delivered a robust performance in the third quarter of fiscal year 2025 (3QFY25), with net profit surging by 24.6% year-on-year to RM57.4 million. This impressive quarterly result propelled the cumulative nine-month (9MFY25) net profit to RM157.9 million, aligning broadly with both internal and consensus estimates. This strong showing has led analysts to maintain a positive outlook for the company, supported by an expanding order book and improved margins.

Performance Review

The Group’s revenue for 3QFY25 grew 12.2% year-on-year to RM566.3 million. This growth was primarily fueled by significant contributions from the property development segments, which saw revenue jump more than four-fold year-on-year to RM87.7 million, driven by strong sales from key projects such as The Vue @ Monterez and Papyrus @ North Kiara. Concurrently, the construction segment provided a stable foundation, with revenue holding solid at RM477.6 million.

The net profit increase was further bolstered by the construction segment, which recorded a 52.7% year-on-year profit increase to RM66.5 million, attributed to improved margins. Similarly, property development earnings more than doubled to RM7.8 million, driven by billings from its two ongoing development projects.

Order Book and Future Outlook

Looking ahead, the Group’s order book has significantly expanded, increasing by 9.4% to RM4.1 billion. This includes a recent related-party job award from Pixel Valley Sdn Bhd for building contracts in Batu Kawan, Penang, valued at RM350.6 million. Year-to-date, new contract wins total RM1.6 billion, representing 80.0% of the company’s FY25 order book replenishment target.

Analysts have upwardly adjusted FY25F-27F net profit estimates by an average of 3.6% to reflect better margins, enhancing earnings visibility for the next two to three years. The substantial order book and ongoing operational efficiencies are expected to sustain the positive trajectory, solidifying the Group’s position in the market.

Investment Recommendation

Given the solid financial performance, strong project execution, a growing order book, and positive future prospects, TA SECURITIES reiterates a “BUY” recommendation for the stock, with a target price of RM0.25, reflecting a potential upside of 25.0%.