KERJAYA: Construction Firm Posts Strong Earnings Beat, Order Book Fuels Positive Outlook
| Key Information | Details |
|---|---|
| Investment Bank | TA SECURITIES |
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A leading construction firm has reported robust financial results for the fourth quarter of 2025 and the full financial year, significantly surpassing market expectations. The strong performance was primarily driven by accelerated progress billings from ongoing projects and effective cost management strategies, leading an investment bank to maintain its positive outlook with a “BUY” recommendation.
Performance Review
The company recorded a core profit after tax and minority interest (PATMI) of RM60.8 million for 4Q25, marking a 44% year-on-year increase. This figure substantially exceeded both the investment bank’s and market’s full-year forecasts, achieving 105% and 112% respectively. For the full financial year 2025, the core PATMI stood at RM168.8 million, similarly outperforming expectations by 112% of the bank’s and market’s full-year estimates.
The stellar financial results are largely attributed to higher progress billings from existing construction projects, indicating efficient project execution and revenue recognition. Effective cost management also played a crucial role in enhancing profitability during the period.
Operational Highlights and Future Outlook
The firm has demonstrated strong momentum in securing new contracts, having accumulated RM2.53 billion in new active order book wins year-to-date as of December 2025. This includes a notable RM500 million contract for the Kampung Nami development project and additional acquisitions totaling RM50 million for a Penang project, along with RM400 million in contracts from other strategic partners.
With these significant wins, the company’s outstanding order book has expanded to RM4.2 billion, providing excellent earnings visibility for the next two to three years. Furthermore, the company has strategically acquired new land parcels totaling 11.9 acres in Jemaluang and Tanjungsam, with an estimated gross development value (GDV) of RM1.6 billion, earmarked for industrial property developments.
Despite these positives, the report highlights potential downside risks, including a property market slowdown and the potential for prolonged cost structures. However, these risks are currently overshadowed by the robust order book and ongoing operational efficiencies.
Investment Bank’s Recommendation
Following the impressive performance and strong pipeline, TA SECURITIES has reiterated its “BUY” recommendation for the company. The investment bank has set a target price of RM0.25, representing an upside of 25.0% from its last traded price of RM0.20.
