RHB Investment Bank (RHB) said today (May 9) they expect Kerjaya Prospek’s 1Q24 core profit to be between MYR34m and MYR36m, which translates to 21-28% YoY and 3-9% QoQ growth.
Growth during the quarter will be backed by better progress of ongoing projects, ie The Meg and Astrum Ampang. RHB forecasts a 3-year (FY23-26F) earnings CAGR of 12% backed by its steady job replenishment trends coupled with better property development contribution.
RHB keeps a BUY call with unchanged MYR2.15 TP, 19% upside.
FY24F dividend yield is also attractive at c.4.4% (higher than most peers).
Additional prospects in the pipeline. Aside from the Seri Tanjung Pinang phase 2 (STP2) development in Penang which has facilitated KPG’s constant job replenishment (c.MYR1.8bn jobs secured cumulatively), RHB highlighted the Bukit Bintang City Centre (BBCC) project which could bring about further opportunities for KPG.
KPG is no stranger to BBCC as the group has clinched close to MYR600m of contracts (spread over four packages) from the said development.
Packages yet to be awarded under BBCC include an office tower, a serviced residences tower, and the BBCC Signature Tower. As of late, RHB observed that there is a structure being built on what was previously known as the BBCC sales office and gallery (which is supposed to be converted into the BBCC Signature Tower).
RHB initially assumed that the said structure relates to works for the BBCC Signature Tower but upon sighting the notification board – the structural works is for converting the sales office and gallery into a temporary business space.
Therefore, works for BBCC Signature Tower has yet to be tendered out and RHB does discount the possibility of KPG (together with Samsung C&T) to eye for the project when tenders are advertised (exact tender timeline not known).
Samsung C&T itself has a track record in skyscraper projects, including the Burj Khalifa and PNB Merdeka 118 Tower and hence, KPG’s existing involvement in BBCC may pave the way for its partnership with Samsung C&T to bid for the project.
RHB estimates the package for the 80- storey BBCC Signature Tower to be well in the excess of MYR500m.
