Kerjaya Prospek’s DC push bolsters earnings outlook

PETALING JAYA: Kerjaya Prospek Group Bhd is poised for stronger earnings visibility after securing its maiden direct data centre (DC) mechanical, electrical and plumbing (MEP) contract, with analysts maintaining a positive outlook on the construction group and raising their target prices.

BIMB Securities Research maintained its “buy” call on Kerjaya Prospek and raised its target price to RM3.40 from RM3.24, citing the group’s record RM5.9bil order book, improving external-client mix and expanding exposure to higher-value DC and industrial projects.

The research house said the RM858mil contract establishes Kerjaya Prospek’s track record in the specialised DC MEP segment and broadens its addressable market.

The contract, secured through wholly owned Kerjaya Prospek (M) Sdn Bhd, involves MEP fit-out works for a DC development in Iskandar Puteri, Johor. It will commence in the third quarter of 2026 and is scheduled for completion within eight months.

An analyst told StarBiz the latest contract win is a positive development for Kerjaya Prospek, providing an additional revenue and earnings stream through financial year 2027 (FY27).

“The award represents a significant step up from its RM52.5mil DC-related subcontract secured in July 2026, as the latest contract is substantially larger and covers direct MEP fit-out works for a DC developer,” he said.

BIMB Research expects the contract to contribute about RM42.9mil to RM51.5mil in cumulative net profit, assuming management’s guided net margin of 5% to 6%.

Earnings are expected to be concentrated in the second half of FY26 and first half of FY27.

TA Research is similarly bullish, maintaining its “buy” recommendation while raising its target price to RM3.90 based on an unchanged 16 times calendar year 2027 price-earnings ratio and a 3% environmental, social and governance premium.

“We continue to favour Kerjaya Prospek for its solid earnings visibility, consistent and robust replenishment of its order book and the potential growth in industrial property construction leveraging the partnership with Samsung,” the research house said.

It estimates a more conservative 4% to 5% net margin for the fixed-lump-sum subcontract, translating into RM34.3mil to RM42.9mil in net earnings.

TA Research said the project’s short eight-month execution period should provide a meaningful boost to Kerjaya Prospek’s FY26 to FY27 earnings.

More importantly, successful entry into DC MEP works should strengthen Kerjaya Prospek’s track record and credentials for future DC projects, potentially improving its tender success rate.

It also sees further DC opportunities arising from the group’s active tender pipeline and partnership with Samsung.

The latest award has lifted Kerjaya Prospek’s FY26 year-to-date job wins to RM3.2bil, already exceeding both brokers’ previous assumptions.

BIMB Research has raised its FY26 replenishment assumption to RM3.5bil from RM3bil, while TA Research lifted its assumption to RM3.5bil from RM2.8bil.

Kerjaya Prospek now needs only about RM300mil more in wins to meet the revised target, which TA Research considers achievable, given its more than RM2bil external tender pipeline and steady internal job flows.

Beyond DC projects, TA Research views a potential RM4bil Penang light rail transit segment two package as a strong earnings re-rating catalyst.

Kerjaya Prospek’s consortium with Sinohydro Corp and PowerChina Group is expected to have an effective 50% stake, with the tender outcome likely in November.