KUALA LUMPUR (June 27): Kenanga Research has maintained its "outperform” rating of Kerjaya Prospek Group Bhd at RM1.10 with a lower target price (TP) of RM1.42 (from RM1.50) and said it reduced its  FY22/FY23 earnings forecasts for Kerjaya by 14%/6% and lower the SOP-TP to RM1.42 (previously RM1.50) anchored to unchanged construction PER of 11 times, a 40% discount over the sector leader’s ascribed PER of 18 times given Kerjaya’s orderbook profile that is skewed towards building works (of which prospects are weighed down by supply overhang).

In a note on Monday (June 27), the research house said it sees the various headwinds Kerjaya currently faces as being temporary.

“We continue to like Kerjaya for: i) its innovative construction solutions and lean cost structure that translate into above-average margins; ii) its hands-on management team and track record of strong execution; iii) and its ability to consistently win external jobs and the availability of job orders from related parties (E&O and KPPROP).

“We also roll forward our valuation base year to FY23 (from FY22). We maintain 'outperform',” it said.