KUALA LUMPUR (Oct 27): RHB Small Cap Asean Research has maintained its “buy” rating for Kerjaya Prospek Group Bhd (KPG) at RM1.20 with a higher target price of RM1.50 (from RM1.42) after applying a 0% ESG premium to its SOP-derived intrinsic value, based on in-house ESG proprietary scoring.

In a note on Thursday (Oct 27), the research house said its unchanged target P/E of 11x (c.10% discount to KLCON index’s forward P/E) is ascribed to the construction segment in its SOP valuation, to reflect KPG’s smaller market capitalisation.

“Upcoming catalysts are further opportunities in infrastructure contracts under Seri Tanjung Pinang Phase 2, which will amount to about RM2 billion in the next five to seven years.

“KPG is trading at an undemanding 9.3x FY23F P/E, at -1.5SD from the KLCON index’s five-year mean P/E,” it said.

RHB Research said that the latest job win is timely, with KPG already in the process of bringing in an additional 500 workers.

It said the company also aims to bring in another batch of 1,500 workers later this year or early next year, which will enable it to gear up for more jobs and operate optimally.

“For the upcoming 3Q2022 results, we believe that core net profit could grow by 15-25% y-o-y to RM28-30 million.

“This would be backed by higher progress billings, in view of its increased working capacity, as circa 200 workers were already on their way to Malaysia in late August,” it said.

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