Kerjaya Prospek Group Bhd shares surged to their highest level since August 1997 on Friday, climbing to RM3.18 after securing its first-ever data centre contract worth RM858 million. The milestone project has prompted widespread target price upgrades among research houses tracking the Malaysian construction firm.
The construction company added as much as 10 sen, or over 3%, to reach RM3.18 during Friday’s trading session—matching levels not seen since August 1997 when the entity operated under the name Fututech Bhd. The stock ultimately closed at RM3.17, pushing the company’s market capitalization to nearly RM4 billion as more than two million shares changed hands.
Contract Scale and Margin Realities for Data Centres
The RM858 million award represents the largest project win in the company’s history, surpassing its previous record of RM710 million for the Astrum Ampang project secured in February 2022. Analysts note that while the data centre deal provides substantial revenue visibility, it carries a slightly compressed profit margin compared to traditional building work.
Market research firms project varying returns for the data centre project. RHB Research estimates net margins will land between five and seven per cent, while Kenanga Research projects a range of five to six per cent.
Kerjaya Prospek extends gain to 1997 high after first
Despite the lower margin profile, analysts emphasize the strategic value of entering the sector. Kenanga Research noted that the project’s eight-month completion window will support high asset efficiency and optimize working capital deployment.
Order Book Expansion and Upgraded Financial Forecasts
The massive data centre award elevated year-to-date order replenishment to RM3.23 billion, surpassing management’s full-year target of RM3.0 billion and outstripping earlier assumptions. Total outstanding jobs on hand have now reached a record RM5.9 billion.
In response to the order influx, financial institutions have revised their projections upward. Kenanga Research raised its full-year job win assumptions for 2026 and 2027 to RM3.5 billion and RM2.5 billion, respectively, alongside higher revenue recognition assumptions.
Subcontracting Prospects and Stake Acquisitions in ES Sunlogy
Market watchers are also eyeing potential supply chain synergies. RHB Research indicated it does not discount the possibility of ES Sunlogy Bhd acting as a subcontractor for mechanical and electrical (M&E) works on the data centre project.
Kerjaya Prospek's maiden data centre job seen yielding 5-7pct
Apex Securities Research deemed the transaction a fair deal, noting the shares were acquired at a 36.15% discount to prevailing market prices through an internal cash swap that left shareholders’ equity unchanged.
Apex cautioned that the group’s 31% stake approaches the 33% threshold that triggers a mandatory general offer, a dynamic worth monitoring if stake-building continues. Strategically, the enlarged holding supports integrated M&E engineering and solar-related delivery across the construction pipeline.
Analyst Sentiment and Long-Term Market Positioning
Following the contract announcement, more than half of the research houses covering the stock lifted their target prices, keeping ‘buy’ recommendations firmly intact. Phillip Capital, recognized as the most bullish house on the stock, raised its target price to RM4.06.
The broader analyst consensus points toward an average target price of RM3.69 over the next 12 months. With shares having gained roughly 23% since the year began, the company’s ability to execute on its record order book will dictate whether market momentum can sustain these multi-decade highs.
Kerjaya Prospek set to gain from new acquisition
Additional Context from Source Material
TA Securities estimated the net margin of the latest project to be around 4%-5%, possibly contributing up to RM43 million in net earnings over the relatively shorter construction period of just eight months. This projection aligns with Kenanga Research’s analysis of the project’s asset efficiency and working capital optimization.
Kerjaya Prospek also has a tie-up with Samsung C&T Corp for large projects which could yield more opportunities, the research house noted. Outstanding jobs on hand, meanwhile, totalled RM5.9 billion which could keep the company busy over the next two to three years, the house added.
RHB Research highlighted that the latest contract accounts for about 15 per cent of KPG’s RM5.9 billion outstanding order book. The firm also mentioned the potential involvement of ES Sunlogy Bhd as a subcontractor for the data centre job’s mechanical and electrical works, emphasizing the strategic alignment of Kerjaya Prospek’s expanded stake in ES Sunlogy.
Apex Securities Research noted that Kerjaya Prospek’s acquisition of a 31% stake in ES Sunlogy implies a price-to-earnings valuation of about 22.3 times based on ES Sunlogy’s profit after tax of RM9.3 million for the annualised nine months of financial year 2026 (FY26). The investment also benefits from ES Sunlogy’s recurring renewable energy income alongside its project-based M&E engineering revenue, which supports medium-term earnings visibility.
Kenanga Research raised the target price-to-earnings ratio for KPG’s construction business to 18 times from 16 times following its successful entry into the data centre market.
