Kerjaya Prospek Group's (KPGB) 3QFY24 net profit increased by 29.1% YoY to RM46m, primarily driven by improved progress in construction activities. Excluding non-core items, the Group's estimate core net profit came in at RM47.5m, bringing the 9MFY24 core net profit to RM122.4m. The cumulative 9MFY24 results were with both our and consensus expectations, accounting for 74.0% and 73.7% of full year estimates respectively. As such, we are maintaining our earnings forecasts. We also reiterate our Neutral call on KPGB with an unchanged SOP based TP of RM1.96. A third interim dividend of 3.00sen per share and special dividend of 4.00sen per share was declared, bringing total dividend for the year to 12.00sen per share (9MFY23: 6.0sen per share).

• 3QFY24 revenue rose 39.4% YoY to RM504.8m mainly due to higher revenue from the construction division. The construction division's revenue increased by 41.6% YoY to RM487.3m, as overall construction work activities have improved. This was partially offset by lower contribution from the property segment of RM16.9m (-4.4% YoY).
• 3QFY24 core net profit rose 33.1% YoY to RM47.4m. The increase in earnings was mainly due to higher contribution from construction division. Construction segmental profit increased by 5.3% YoY to RM43.5m, in line with higher revenue. However this was partly offset by lower contribution from property division, which reported a segmental profit of RM2.4m (-4.4% YoY).
• Outstanding order book of RM4.4bn. Moving forward, the construction segment is expected to remain the main contributor to the Group's overall revenue and profitability. KPGB's outstanding construction orderbook currently stands at RM4.4bn, providing earnings visibility for the next 2-3 years. Cumulative YTD new wins amounted to RM1.6bn, representing 88.8% of our FY24 target orderbook of RM1.8bn.

Source: PublicInvest Research - 28 Nov 2024