BERHAD: Construction Firm Boosts Order Book with New Johor Bahru Project
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A prominent construction group has significantly expanded its order book with the securing of a new building contract valued at RM225.0 million. The latest award involves the construction of a substantial serviced apartment tower in Johor Bahru, reinforcing the company’s strategic presence in a high-growth corridor.
Performance Review and New Contract Details
The new project, awarded by Majestic Gen SB, marks the group’s second major win in Johor Bahru. This strategic expansion aligns with the region’s robust growth drivers, notably the establishment of the Johor-Singapore Special Economic Zone and the Johor Bahru-Singapore Rapid Transit System (RTS).
The contract entails the development of Gen Sphere, a 50-storey serviced apartment tower that will include 996 residential units, two levels of recreational facilities, and commercial space. Construction is slated to commence on January 16, 2026, with a projected completion timeline of 38 months.
Order Book and Future Outlook
This latest contract award has notably bolstered the group’s year-to-date new order book replenishment, which has increased by 14.3% to RM1.8 billion. Consequently, the outstanding order book has risen by 5.5% to a robust RM4.3 billion, providing clear earnings visibility for the next three years. This project is factored into the financial institution’s FY25 orderbook replenishment assumption of RM2.0 billion.
The group is strategically positioned to capitalise on Johor Bahru’s promising growth prospects and is actively pursuing land bank replenishment to support future property development initiatives. Analysts maintain an “Outperform” recommendation, with earnings forecasts remaining unchanged.
