Kerjaya Prospek bags RM332m contract for KL project

By SHAZNI ONG / Pic By MUHD AMIN NAHARUL

KERJAYA Prospek Group Bhd (KPG) has secured a RM331.95 million contract to construct the main building of a proposed development project at Jalan Kia Peng, Kuala Lumpur (KL).

The group’s wholly owned subsidiary, Kerjaya Prospek (M) Sdn Bhd, has accepted a letter of award from Patsawan Properties Sdn Bhd, an indirect joint-venture company of Eastern & Oriental Bhd (E&O) with Mitsui Fudosan (Asia) Pte Ltd, for the construction of the main building works for the proposed development project.

“Inclusive of this contract, the group has increased its outstanding orderbook to approximately RM3.8 billion, which will provide healthy earnings visibility for the next three years,” KPG executive chairman Datuk Tee Eng Ho (picture) said in a statement yesterday.

The contract entails the main building works for a 54-storey building comprising 491 units of serviced apartments across 44 storeys and a 10-storey car park with common facilities.

The construction works will take approximately 35 months to complete from its commencement date of Jan 20, 2020.

The contract is expected to provide an additional revenue stream for the group over the next four years, besides further increasing its existing orderbook.

Last week, the construction, property development, and lighting and kitchen solutions firm bagged a RM617 million contract by Aspen Vision City Sdn Bhd to develop a proposed apartment project in Penang.

The job itself represents half of the group’s orderbook target of RM1.2 billion for the financial year ended Dec 31, 2019 (FY19).

By clinching these contracts at the start of the year, the group is on track to achieve Kenanga Investment Bank Bhd’s (Kenanga Research) full-year contract wins target of RM1.2 billion.

“No change to our earnings forecasts. Following these latest contract wins, the company’s outstanding construction orderbook has jumped to RM3.5 billion, which will underpin earnings visibility for the next three to four years,” the research firm wrote in a recent note.

Kenanga Research maintained its ‘Outperform’ call on the company, with an unchanged target price of RM1.50.

The job win for the Jalan Kia Peng project is considered a recurrent related-party transaction (RRPT) of a revenue or trading nature pursuant to Bursa Malaysia Securities Bhd’s listing requirements.

Eng Ho is a non independent non-ED and substantial shareholder of E&O together with his brother, Eng Seng, who is also a substantial shareholder of E&O.

The RRPT mandate was approved by KPG shareholders at their AGM in May last year, as well as at E&O’s AGM in August 2019.

Shares of KPG closed 0.77% or one sen higher at RM1.31 yesterday, valuing the firm at RM1.63 billion.