KUALA LUMPUR (Sept 2): Kerjaya Prospek Group Bhd shares rose as much as 23.53% or 24 sen to RM1.26 in morning trade today after the construction company secured an RM203.7 million contract from Gamuda Bhd.

At 10.45am, Kerjaya Prospek shares had pared some gains and were traded at RM1.09, with a market capitalisation of RM1.26 billion. It was among the top 10 gainers on Bursa Malaysia so far today.

Yesterday, Kerjaya Prospek said the contract is its maiden project with Gamuda. Under the 27-month contract, Kerjaya Prospek will undertake the construction of a residential and commercial development project in Gamuda Cove.

The contract marks Kerjaya Prospek fourth for the year, bringing its total contract wins to date to RM1.2 billion in value,  while its outstanding order book now stands at RM3.6 billion.

Meanwhile, Kenanga Research is positive on the new contract win from a new client for Kerjaya Prospek, and the research house increased its new order book replenishment target to RM1.5 billion from RM1.3 billion previously.

Consequently, Kenanga Research revised up its earnings projection by 3% for the financial year ending Dec 31, 2021 (FY21), estimated at RM157.6 million. However, its earnings forecast for FY20 is maintained at RM105.6 million — 24.65% lower than a net profit of  RM140.14 million recorded for FY19.

This would translate into earnings per share (EPS) of 8.5 sen for FY20 and 12.7 sen for FY21.

Besides that, Kenanga Research maintained its “outperform” rating with a higher target price (TP) of RM1.50, from RM1.45 previously, and said this is anchored by Kerjaya Prospek's construction segment.

“We like Kerjaya Prospek for its strong replenishment prowess, net cash position despite its growing top line, and [with it] trading at an appealing ex-cash FY21E PER (price-earnings ratio) of 6.9 times,” it added.

Edited by Surin Murugiah