Kerjaya Prospek set to ride power infrastructure boom

KUALA LUMPUR: Kerjaya Prospek Group Bhd is poised to benefit from robust project flows in the power infrastructure segment, according to Hong Leong Investment Bank Bhd (HLIB).

This is supported by higher capital expenditure by Tenaga Nasional Bhd (TNB), accelerating data centre developments and solar infrastructure investments.

The firm said the group's entry into the power infrastructure segment through a maiden contract win from TNB positions it to tap Malaysia's growing investment cycle.

The RM568.2 million contract, secured through a joint venture with Jati Tinggi Holdings Bhd and Betapac Sdn Bhd, involves the development of a transmission main intake substation in Paka, Terengganu.

Under the arrangement, Kerjaya Prospek will undertake the core and shell works with a 25 per cent stake, translating into an estimated RM142.1 million in revenue over two years.

HLIB said the contract brings Kerjaya Prospek's outstanding order book to about RM6 billion and year-to-date job replenishment to RM3.5 billion, providing strong earnings visibility alongside a healthy tender pipeline of about RM2 billion.

Kerjaya Prospek's 31 per cent stake in ES Sunlogy further broadens its exposure to the segment, opening up opportunities in mechanical and electrical engineering works.

On valuation, HLIB said Kerjaya Prospek trades at 13.8 times and 12.6 times its forecast financial year 2027 and 2028 earnings, respectively, below its three-year historical average of 14.3 times and the peer average of 18.8 times and 16.5 times.

It said the valuation was supported by an estimated 15.1 per cent compound annual growth rate in earnings per share between FY26 and FY28, alongside projected dividend yields of 4.0 to 4.5 per cent over the same period.

From a technical perspective, HLIB said Kerjaya Prospek's share price had undergone healthy profit-taking after rallying 82 per cent from its year-to-date low of RM2.06 to RM3.74 before rebounding to RM3.46 on elevated trading volume.

The stock has reclaimed its 20-day moving average and formed a higher low, suggesting its upward momentum is regaining traction.

A decisive breakout above RM3.60, its September 11 high, could pave the way for a retest of RM3.74, its year-to-date peak, and potentially RM3.98, based on the 114 per cent Fibonacci retracement level.

HLIB identified support levels at RM3.41, RM3.35 and RM3.15, corresponding to the 20-day moving average, 50-day moving average and October low, respectively, with a stop-loss level at RM3.21.