Kerjaya Prospek shares test eight-year high as investors celebrate dividend surprise

• Analysts now expect Kerjaya Prospek to dish out a record-high dividend totalling 15 sen per share, following the latest planned distribution of seven sen per share. Year-to-date, the company has declared dividends amounting to 12 sen per share.

KUALA LUMPUR (Nov 28): Shares of Kerjaya Prospek Group Bhd (KL:KERJAYA) climbed to their highest in eight years, following an unexpected special dividend following third-quarter results.

Kerjaya Prospek climbed as much as nine sen or over 4% to RM2.24 on Thursday, its highest since a reverse takeover in 2016. The stock was trading at RM2.20 at 10.45am, giving the company a market capitalisation of RM2.8 billion. Trading volume totalled 551,200 shares so far.

Analysts now expect Kerjaya Prospek to dish out a record-high dividend totalling 15 sen per share, following the latest planned distribution of seven sen per share. Year-to-date, the company has declared dividends amounting to 12 sen per share.

The yield is still “attractive” at about 5% based on regular dividend alone, even as there is now limited upside to Kerjaya Prospek’s share price, said Kenanga Investment Bank, which downgraded the stock to “market perform” from “outperform” following the recent rally.

Shares of Kerjaya Prospek have gained more than 41% so far this year, thanks to news of recent contract wins and strong earnings growth. The stock has also benefitted from broader optimism on the construction sector by investors betting on rollout of private and public projects.

There are still six “buy” calls among eight research houses covering Kerjaya Prospek, following Kenanga’s downgrade, with the remaining two being on “hold” recommendations. The consensus 12-month target price is RM2.44, according to Bloomberg, implying upside of 11% from current prices.

Beyond the dividend, the earnings growth so far this year appears in line with market expectations, with the January-September core net profit accounting for about 74% of the market’s full-year estimates.

Earnings growth momentum is expected to be strong in the remaining months of 2024, Phillip Capital said, noting RM4.4 billion outstanding construction jobs and RM200 million unbilled sales from ongoing property development projects.

“We remain positive about Kerjaya’s earnings prospects,” supported by robust contract flows from sister companies Eastern & Oriental Bhd (KL:E&O), as well as Kerjaya Prospek Property Bhd (KL:KPPROP), the research house added.

Net profit for the three months ended Sept 30, 2024 (3QFY2024) surged 30% year-on-year to RM46.09 million, from higher progress billings. Revenue was RM504.84 million, an increase of 39% when compared to the same quarter last year.

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