PETALING JAYA: Kerjaya Prospek Group Bhd ’s prospects are strong as it has managed to load up its order book at respectable margins.

       This also comes on the company having clinched its biggest construction contract worth RM710mil for a property project in Ampang recently.

       “Kerjaya Prospek has continued to deliver on new job wins with contracts worth around RM1bil for the financial year 2021 (FY21),” RHB Research said in a report.

       The recent Ampang property project brings its latest outstanding order book to RM4.1bil and translates to an order book-to-revenue cover ratio of about 4.3 times, RHB Research said.

       In its fourth-quarter 2021 results, RHB Research noted that Kerjaya Prospek’s net profit margin was at 12%. This was the pre-pandemic norm on the back of improved work construction progress in light of better operating conditions amid the reopening of the economy in the fourth quarter last year.

       For its fourth quarter ended Dec 31, 2021, Kerjaya Prospek’s net profit rose to RM30.39mil from RM27.98mil in the previous corresponding period. Revenue grew to RM283.72mil from RM248.85mil a year earlier.

       Meanwhile, TA Research highlighted that Kerjaya Prospek’s net cash position had eased slightly from RM177mil a quarter ago to RM176.3mil in the most recent reported quarter.

       “Kerjaya Prospek’s FY21 core profit of RM104.8mil came in within our expectations but above consensus forecast, accounting for 104.6% and 109.9% of our and consensus full-year estimates respectively,” TA Research said.

       The research house also highlighted that the group was currently facing a minor labour shortage issue.

       However, management expects the issue to be resolved by the first half of this year should the government ease border restrictions.

       “We maintain the FY22 and FY23 earnings forecasts. We introduce FY24 numbers with a projected net profit of RM178.7mil, representing an earnings growth of 4.4%,” TA Research said.

       It reiterated its “buy” call on the counter and did not change its target price of RM1.62, based on an unchanged 14 times 2022 earnings per share.

       RHB Research increased its FY22-FY23 forecast earnings by 5% respectively, as it has revised its annual job replenishment targets to RM1.2bil for FY22 and RM1bil for FY23.

       RHB Research has maintained its “buy” call on the counter with a new target price of RM1.52 and lowered its target price-to-earnings ratio of 11 times from 14 times, which is the valuation that is had ascribed to the construction segment.