Monday, August 11, 2025
FBMKLCI: 1,556.98
Sector: Construction
Kerjaya Prospek Group Berhad: Cash-Rich and Blueprint-Ready
Last Traded: RM2.10
Tel: +603-2167 9601
raymondng@ta.com.my
www.taonline.com.my
Result Preview
KERJAYA is set to announce its 2QFY25 results on 25 August 2025. We project quarterly earnings to come in between RM44.0mn and RM48.0mn, bringing IHFY25 to RM88.2-92.2mn, which represents approximately 47.8%-50.0% of our FY25 earnings estimates.
This translates into a commendable YoY growth of approximately 17.6% to 22.9%, largely underpinned by consistent progress billings and strong job replenishment momentum. Also, we expect a second interim dividend payout of 3.0sen per share will be announced during the quarter, bringing the total dividend payout for IHFY25 to 6.0sen. Notably, KERJAYA secured RM1.6bn in new contracts throughout FY24, with an unbilled order book now standing near RM4.0bn as of end-Mar 2025.
Following our latest engagement with the management team, we remain confident in the prospects for KERJAYA’s property arm, supported by its recent strategic landbanking in Jalan Puchong, Selangor. Key takeaways are summarised below:
New Earnings Booster from the Property Division in FY27
KERJAYA plans to submit planning applications for its newly acquired land parcels in Jalan Puchong by end-CY25, with approval expected by end-CY26. The project, with an estimated GDV of c.RM800mn—predominantly comprising serviced apartment units—is targeted for market launch in CY27.
This expansion into property development is primarily anchored by KERJAYA’s solid net cash position of RM336.7mn (as of March 2025). The group is tactically leveraging its financial strength, especially as sister companies KPPROP and E&O approach peak gearing levels. While comfortable with a net gearing ceiling of 0.3x, management sees no need to draw down existing financing facilities given its sizeable cash reserves, which are sufficient to support near-term development and working capital requirements.
This initiative marks KERJAYA’s fourth self-branded development, following the strong take-up rates at The Vue (94%) and Papyrus (currently at 78%). To note, Papyrus is slated for completion by 2QCY26 while The Vue is scheduled for end-CY26. Concurrently, E&O is anticipated to accelerate launches worth up to RM2.0bn across FY26, before slowing down in FY27. KERJAYA is well-positioned to act as the main contractor on these projects while driving new growth in its orderbook.
Nonetheless, forthcoming projects under its joint venture with Aspen in Batu Kawan may competition from nearby developments, particularly those led by SkyWorld. Despite this, management remains optimistic about demand, citing product differentiation tailored to distinct market segments.
Share Information
| Bloomberg Code | KPG MK |
| Stock Code | 7161 |
| Listing | Main Market |
| Share Cap (mn) | 1257.3 |
| Market Cap (RMmn) | 2640.4 |
| 52-wk Hi/Lo (RM) | 2.41/1.77 |
| 12-mth Avg Daily Vol (‘000 shrs) | 1095.5 |
| Estimated Free Float (%) | 29.3 |
| Beta | 0.60 |
Major Shareholders (%)
| Egovision Sdn Bhd | 49.8 |
| Amazing Parade Sdn Bhd | 17.9 |
| EPF | 5.0 |
Forecast Revision
| FY25 | FY26 | |
|---|---|---|
| Forecast Revision (%) | 0.0 | 0.0 |
| Net profit (RMm) | 184.4 | 226.1 |
| Consensus | 198.5 | 224.0 |
| TA’s / Consensus (%) | 92.9 | 101.0 |
| Previous Rating | Buy (Maintained) | |
| Consensus Target Price | 2.63 | |
Financial Indicators
| FY25 | FY26 | |
|---|---|---|
| Net Debt / Equity (%) | Net Cash | Net Cash |
| FCPS (sen) | 13.5 | (10.9) |
| P/CFPS (x) | 15.5 | (19.3) |
| ROA (%) | 9.2 | 10.7 |
| NTA/Share (RM) | 0.8 | 0.8 |
| Price/NTA (x) | 2.8 | 2.7 |
Share Performance (%)
| Price Change | KERJAYA | FBM KLCI |
|---|---|---|
| 1 mth | 1.9 | 1.8 |
| 3 mth | 2.4 | 0.9 |
| 6 mth | (2.3) | (2.1) |
| 12 mth | 11.9 | (2.1) |
Our View
We do not anticipate any meaningful earnings contribution from the Jalan Puchong project before FY27. Revenue visibility will remain anchored by the construction segment, which continues to operate smoothly. The management has observed a cautious sentiment in the domestic property landscape, with some developers adopting a wait-and-see stance due to policy uncertainty surrounding the proposed expansion of the Sales and Service Tax (SST) and possible revisions to utility tariffs.
Importantly, discussions on the extended stop of SST-particularly in relation to construction services—are still ongoing between stakeholders and policymakers. As such, the full impact remains uncertain.
Forecast
No change to our earnings forecasts.
Valuation
We maintain our Buy recommendation on the stock with an unchanged target price of RM2.97, based on 16x CY26 EPS and 3% ESG premium, given our 4-star rating. Furthermore, the stock presents an attractive dividend yield of 5.8% based on our projected dividend of 12sen/share for FY25.
We continue to like KERJAYA for its:- (i) solid earnings visibility, (ii) consistent and robust replenishment of its order book and (iii) the potential growth in industrial property construction leveraging the partnership with Samsung.
Earnings Summary
Profit & Loss (RMmn)
| YE Dec 31 | 2023 | 2024 | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Revenue | 1,472.8 | 1,835.5 | 1,756.2 | 2,154.4 | 2,274.4 |
| EBITDA | 195.9 | 234.5 | 266.9 | 324.4 | 368.0 |
| Dep. & amortisation | (16.3) | (16.8) | (17.3) | (18.4) | (19.4) |
| Net finance cost | (1.6) | (1.4) | (0.5) | (0.5) | (0.5) |
| PBT | 178.0 | 216.3 | 249.0 | 305.5 | 348.0 |
| Taxation | (46.3) | (56.2) | (64.6) | (79.3) | (90.3) |
| MI | (0.2) | (0.0) | (0.0) | (0.1) | (0.1) |
| Net profit | 131.5 | 160.1 | 184.4 | 226.1 | 257.6 |
| Core net profit | 126.5 | 174.3 | 184.4 | 226.1 | 257.6 |
| GDPS (sen) | 8.0 | 15.0 | 12.0 | 14.0 | 15.0 |
| Div Yield (%) | 3.8 | 7.1 | 5.7 | 6.7 | 7.1 |
Balance Sheet (RMmn)
| YE Dec 31 | 2023 | 2024 | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Fixed assets | 92.4 | 92.7 | 95.4 | 97.0 | 97.6 |
| Others | 235.3 | 239.9 | 239.9 | 239.9 | 239.9 |
| NCA | 327.6 | 332.6 | 335.2 | 336.8 | 337.4 |
| Cash and cash equivalent | 195.7 | 294.5 | 464.2 | 327.7 | 358.4 |
| Others | 1,066.2 | 1,324.0 | 1,249.8 | 1,529.7 | 1,622.4 |
| CA | 1,262.0 | 1,618.5 | 1,714.0 | 1,857.4 | 1,980.8 |
| Total assets | 1,589.6 | 1,951.0 | 2,049.2 | 2,194.2 | 2,318.2 |
| ST borrowings | 8.6 | 2.0 | 2.0 | 2.0 | 2.0 |
| Other liabilities | 374.4 | 804.9 | 869.2 | 963.6 | 1,018.1 |
| CL | 383.0 | 806.8 | 871.2 | 965.6 | 1,020.1 |
| Shareholders’ funds | 1,153.0 | 1,135.5 | 1,169.4 | 1,220.0 | 1,289.5 |
| MI | 0.7 | 0.7 | 0.7 | 0.7 | 0.7 |
| LT borrowings | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Other LT liabilities | 52.9 | 7.9 | 7.9 | 7.9 | 7.9 |
| Total capital | 1,589.6 | 1,951.0 | 2,049.2 | 2,194.2 | 2,318.2 |
Cash Flow (RMmn)
| YE Dec 31 | 2023 | 2024 | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| PBT | 178.0 | 216.3 | 249.0 | 305.5 | 348.0 |
| Adjustments | 17.8 | 18.2 | 17.9 | 18.9 | 19.9 |
| Changes in WC | (121.2) | 136.8 | 138.6 | (185.5) | (38.2) |
| Others | (0.9) | 23.9 | (0.0) | (0.1) | (0.1) |
| Operational cash flow | 27.4 | 339.1 | 340.8 | 59.6 | 239.3 |
| Capex | (18.1) | (28.8) | (20.0) | (20.0) | (20.0) |
| Others | 7.7 | 8.0 | (8.4) | 0.0 | 0.0 |
| Investment cash flow | (10.5) | (20.8) | (28.4) | (20.0) | (20.0) |
| Debt raised/(repaid) | 18.9 | 0.0 | 0.0 | 0.0 | 0.0 |
| Dividend | (88.3) | (201.8) | (150.5) | (175.6) | (188.1) |
| Others | 0.0 | (2.2) | (0.5) | (0.5) | (0.5) |
| Financial cash flow | (69.4) | (203.9) | (151.0) | (176.1) | (188.6) |
| Forex effect | 1.0 | (1.0) | 0.0 | 0.0 | 0.0 |
| Deposit | (29.7) | (22.8) | (22.8) | (22.8) | (22.8) |
| Net cash flow | (62.7) | 106.7 | 169.8 | (136.5) | 30.7 |
| Beginning cash | 227.8 | 166.1 | 271.7 | 441.5 | 305.0 |
| Ending cash | 166.1 | 271.7 | 441.5 | 305.0 | 335.7 |
| Deposit pledged | 29.7 | 22.8 | 22.8 | 22.8 | 22.8 |
| Cash | 195.7 | 294.5 | 464.2 | 327.7 | 358.4 |
Ratio
| YE Dec 31 | 2023 | 2024 | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| EBITDA Margins (%) | 13.3 | 12.8 | 15.2 | 15.1 | 16.2 |
| Core EPS (sen) | 10.1 | 13.9 | 14.7 | 18.0 | 20.5 |
| EPS Growth (%) | 5.5 | 37.8 | 5.8 | 22.6 | 13.9 |
| PER (x) | 20.8 | 15.1 | 14.3 | 11.6 | 10.2 |
| GDPS (sen) | 8.0 | 15.0 | 12.0 | 14.0 | 15.0 |
| Div Yield (%) | 3.8 | 7.1 | 5.7 | 6.7 | 7.1 |
| Net cash (RMmn) | 187.2 | 292.5 | 462.3 | 325.8 | 356.5 |
| Net gearing (%) | (16.2) | (25.8) | (39.5) | (26.7) | (27.6) |
| ROE (%) | 11.6 | 14.0 | 16.0 | 18.9 | 20.5 |
| ROA (%) | 8.7 | 9.0 | 9.2 | 10.7 | 11.4 |
| NTA/share (sen) | 73.8 | 72.4 | 75.1 | 79.1 | 84.6 |
| P/NTA(x) | 2.8 | 2.9 | 2.8 | 2.7 | 2.5 |
Assumptions (RM bn)
| YE Dec 31 | 2023 | 2024 | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| New job wins | 1.6 | 1.6 | 1.8 | 1.8 | 1.8 |
ESG Scoring & Guideline
| Environmental | Social | Governance | Average | |
|---|---|---|---|---|
| Scoring | ★★★★ | ★★★★ | ★★★★ | ★★★★ |
| Remark | ISO 14001: 2015 certified. Usage of aluminium formwork is much more environmentally friendly than conventional formwork. | OHSAS 18001 certified. Recently received a compliment by the Ministry of Works for adopting modular construction concept in the construction of workers’ quarter and compliance with workers’ quarter requirements. | 33.3% female board representation. Relevant policies and procedures have been established to govern the group. |
| ★★★★★ (≥80%) | Displayed market leading capabilities in integrating ESG factors in all aspects of operations, management and future directions. | +5% premium to target price |
| ★★★★ (60-79%) | Above adequate integration of ESG factors into most aspects of operations, management and future directions. | +3% premium to target price |
| ★★★ (40-59%) | Adequate integration of ESG factors into operations, management and future directions. | No changes to target price |
| ★★ (20-39%) | Have some integration of ESG factors in operations and management but are insufficient. | -3% discount to target price |
| ★ (<20%) | Minimal or no integration of ESG factors in operations and management. | -5% discount to target price |
Sector Recommendation Guideline
OVERWEIGHT: The total return of the sector, as per our coverage universe, exceeds 12%.
NEUTRAL: The total return of the sector, as per our coverage universe, is within the range of 7% to 12%.
UNDERWEIGHT: The total return of the sector, as per our coverage universe, is lower than 7%.
Stock Recommendation Guideline
BUY: Total return of the stock exceeds 12%.
HOLD: Total return of the stock is within the range of 7% to 12%.
SELL: Total return of the stock is lower than 7%.
Not Rated: The company is not under coverage. The report is for information only.
Total Return of the stock includes expected share price appreciation, adjustment for ESG rating and gross dividend. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Total Return of the sector is market capitalisation weighted average of total return of the stocks in the sector.
Disclaimer
The information in this report has been obtained from sources believed to be reliable. Its accuracy and/or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein.
As of Monday, August 11, 2025, the analyst, Raymond Ng Ing Yeow, who prepared this report, has interest in the following securities covered in this report: (a) nil
