Kerjaya Prospek Group Berhad

MALAYSIA
INVESTMENT RESEARCH REPORT
KDN PP13226/04/2014 (032022)
JF APEX SECURITIES BERHAD
(47680-X)
Trading Idea
28 January 2016
Kerjaya Prospek Group Berhad
Not Rated
A Niche Contractor in Premium Residential Development
Fair Value: RM2.11
Share Price
Fair value
RM1.75
RM2.11
Investment Highlights

We derive our fair value of RM2.11 for Kerjaya Prospek
Group Bhd (KPGB) by pegging at PER of 11.50x FY16 EPS.
The target PE assigned is at the range of upcycle PE for small-andmid cap contractors amid current booming construction industry.
Hence, our fair value renders 20.5% upside from the closing price
of RM1.75. We favour KPGB as it is a niche construction player in
premium high-rise building segment which differentiates itself with
others in respect of work scope and job margin.

Kerjaya Prospek Group Bhd (Previously known as Fututech
Bhd, has officially changed its name w.e.f. 21 January
2016) was originally focusing on design, manufacturing and
marketing of both lighting production and premium kitchen
cabinetry. Over the years, the Group has diversified into building
construction and property development, project management,
interior fit-out and miscellaneous construction related services for
premium residential property. With the recently approved
acquisition of Kerjaya Prospek Sdn Bhd and Permatang Bakti Sdn
Bhd, this enables the Group to enlarge its construction order book
to RM2.7b, lifting its future earnings substantially.

Superb construction margin – During FY2012 to FY2014,
Kerjaya Prospek Sdn Bhd (the target acquiree) has marked an
average PBT margin of 11% and net margin of 8% (against
industry average of 9% PBT margin and 6% net margin) with
FY14 PBT margin of 13.6% and net margin of 10.3% respectively.
We understand that the superb margin achieved was mainly
attributed to the vast experience and skill knowledge of the
management team to carry out its construction project effectively.
Firstly, the company developed its own systematic flows in
construction progress and procurement that yield better quality yet
less time-consuming. Secondly, the company gained competitive
edge by purchasing raw material in cash that entitled for better
price and in better bargaining position when paying subcontractors in cash. Thirdly, the company maintained its in-house
trained labour force of c.3000 workers, mainly Indonesian, to
ensure delivering high standard of workmanship and timely
handover given full control of workforce. Thus, we expect the
Group continues to strike superb margin moving forward base on
existing strength and management team upon completion of the
acquisition of the target acquiree.

Sustainable earnings growth underpinned by sizeable
current orderbook……. Judging from the sizeable orderbook of
RM2.7b which provides earnings visibility till FY2018, we believe
KPGB would not have any difficulty to achieve its RM150m
cumulative profit guarantee over the next three years with
estimated net margin of 5-6% arising from the acquisition of the
two privately owned companies.

……….and target orderbook. We are optimistic on its yearly
orderbook replenishment of RM500-600m despite market concern
on KPGB‟s heavily relying on its three major customers, i.e. SP
Setia, E&O and EcoWorld for future contracts coupled with current
slowing property market. We are unfazed by this high customer
concentration risk and prevailing property market condition as
Company Description
Kerjaya Prospek Group Bhd manufactures aluminium
lighting louvers and advertising point of sale and related
products. The group also manufactures, assembles,
supplies and sells light fittings and related products.
Stock Data
Bursa / Bloomberg code
Board / Sector
Syariah Compliant status
Issued shares (m)
Par Value (RM)
Market cap. (RM’m)
52-week price Range
Beta (against KLCI)
3-m Average Daily Volume
3-m Average Daily Value
7161 / FUT MK
Main / Industrial
Yes
128.74
0.50
225.29
RM1.07-1.84
0.90
0.09m
RM0.14m
Share Performance
Absolute (%)
Relative (%-pts)
1m
8.0
10.1
Major Shareholders
Egovision Sdn Bhd
Tee Eng Ho
Loo Soo Loong
Yong See Boon
Weng Lum Kwok
3m
7.4
24.7
12m
59.1
75.8
%
77.73
1.80
1.60
1.21
1.06
Historical Chart
Source: Bloomberg
Research Team
03-87361118, ext. 754
[email protected]
Please read carefully the important disclosures at end of this publication
28 Jan 2016
Trading Idea – Kerjaya Prospek Group Bhd
JF APEX SECURITIES
these three customers are well established and reputable property
developers in town with bread-and-butter township projects to
sustain their future launches and sales target. In addition, KPGB
has close rapport with the abovementioned major customers
(EcoWorld is currently run by the former SP Setia‟s management
team) with more than 10 years working relationship. Based on our
preliminary calculations, each of these three major customers
targets minimum yearly new sales of about RM0.5-2b which
translates into easily RM600m-750m yearly new contracts for
KPGB based on the Group‟s success rate of bidding of 20-25%.

Diversifying into property development – We are positive
with KPGB venturing into property development to further
complement its existing businesses. In view of the Group's ability
to manage and control construction costs effectively as a main
contractor, moving up in the value chain will improve and enhance
the long-term outlook for the Group with its planned projects in
Gohtong Jaya, Genting Highlands (GDV of RM300m which was
launched recently) and the Monterez Golf Club, Shah Alam (GDV of
RM200m with target launch yet to be confirmed). In realising the
current softening property market, KPGB adopts „quick-turnaround‟
strategy by developing a small piece of landbank, preferably JV
with landowner in order to free up more cash flow as property
development business is capital intensive in nature.

Favourable input cost on the back of cheaper raw material
prices – In view of the relatively lower prices in steel bar, cement
and fuel cost as compared to past few years, KPGB shall be able to
benefit significantly from the lower construction and transportation
costs in anticipation of margin expansion going forward. However,
the benefit only flowing into current order book secured, i.e. the
RM2.7b works as bidding of new projects are based on prevailing
raw material prices and hence the Group may not benefit fully on
the cost saving stemming from the cheaper raw material prices.
Risk

The major risk will be prolonged and further deterioration
in property industry. This would affect the future order book
replenishment for the Group especially for premium residential
property projects. However, we see the risk is not imminent given
the current order book which will keep the Group busy for the next
3 years. Besides, given the efficiency of KPGB in carrying out
construction activities and vast experience of the management,
this shall help the Group to sustain its profit margin and therefore
its future earnings.
Valuation/Recommendation

Our fair value for KPGB (Not Rated) is at RM2.11 based on
PER of 11.50x of FY16 EPS. The target PE assigned is at the
range of upcycle PE for small-and-mid cap contractors amid
current booming construction industry. We like the Group for its:
a) superb margin deriving from its construction jobs; b) sizeable
outstanding orderbook; c) clear earnings visibility underpinned by
long-term working relationship with the reputable developers; and
d) further topline and bottomline boosts from the property
development venture.
2
28 Jan 2016
Trading Idea – Kerjaya Prospek Group Bhd
JF APEX SECURITIES
Background
Kerjaya Prospek Group Bhd (Previously known as Fututech Bhd, has officially changed its name w.e.f. 21
January 2016) was first listed in KLSE in 1996 by the name of Ulbon Berhad. Kerjaya Prospek Group Bhd
was primarily focusing on design, manufacturing and marketing both lighting production and premium
kitchen cabinetry. Throughout the years, the group diversified into building construction and property
development, project management, interior fit-out and miscellaneous construction related services for
premium residential property. Presently, the group is a premium construction contractor with a client
portfolio including SP Setia, Eco World and E&O. For its own property development project, the group has
recently launched its Gohtong Jaya project. In line with the group‟s expansion plan, the group entered
into the conditional share sale agreement for the proposed acquisition of the two privately owned
companies, i.e. Kerjaya Prospek Sdn Bhd and Permatang Bakti Sdn Bhd on 15 September 2015 and it is
expected to conclude the corporate exercise by February 2016.
Figure 1: Corporate Structure of Kerjaya Prospek before the acquisition (previously known as
Fututech)
Source: Company, JF Apex
Figure 2: Board of Directors
Datuk Tee Eng Ho
Executive Chairman
Tee Eng Seng
Executive Director
Datin Toh Siew Chuon
Executive Director
Khoo Siong Kee
Senior Independent Non-Executive Director
Professor Datuk Dr. Nik Mohd Zain Bin Nik Yusof
Independet Non-Executive Director
Lim Kien Lai @ Lim Kean Lai
Independent Non-Executive Director
Source: Company, JF Apex
3
28 Jan 2016
Trading Idea – Kerjaya Prospek Group Bhd
JF APEX SECURITIES
Figure 3: Construction Portfolio (Completed Projects)
Source: Company, JF Apex
Business Activities
Construction Activities
The construction activities of Kerjaya Prospek Group Bhd are primarily undertaken by its wholly owned
subsidiary, namely Ace Equity Sdn Bhd ("AESB"), which is currently involved in the business of building
construction, project management, interior fit-out business and miscellaneous construction related
services for the premium residential property segment. AESB is registered with the Construction Industry
Development Board (CIDB) 'G7' category and as such they are able to execute and manage a wider
spectrum of contracts in the market. In view with their vast, established and reliable network of subcontractors, suppliers and partners, they are able to deliver quality products and service on a timely basis
to support the often demanding project timelines. As an end result and project driven company, they
work closely with developers, architects, main contractors and various consultants to attain results that
any premium developer would proudly endorse with their corporate signature.
Property Activities
The property development division was born out of a plan to further diversify and integrate the Group's
businesses. In view that the Group's ability to manage and control construction costs effectively as a main
contractor, moving up the value chain will improve and enhance the long term outlook for the Group with
its planned projects in Gohtong Jaya, Genting Highlands and the Monterez Golf Club, Selangor. Although
property development is considered a new venture in the Group, the team behind the Group is not new to
the property development industry with their successful track record of previous property launches in the
market.
Manufacturing Activities
The group involved in manufacturing their own brand of Kitchen and Lighting products which are “FORTE”
Kitchen‟s products and “BRITE-LITE” lighting‟s products. "FORTE", is a well-known brand name in the
premium residential property market amongst industry players. Both of the products are primarily
focusing on projects basis which have synergy with the group‟s construction and property activities.
The group‟s integrated solution for project based kitchen cabinetry business ranges from design,
building mock-ups, mass production to project implementation. They have in-depth understanding and
experiences from working with premium developers, architects and contractors which enable them to
meet quality benchmarks and project demands on kitchen cabinetry deliverables at many levels. With a
well-supported manufacturing facility and their unique manufacturing experience in wood and metal
processes, they are able to merge wood and stainless steel kitchen cabinetry products under one roof.
They combined "form & function", "practicality & image" and "quality & value" to help clients achieve their
objectives and deliver satisfaction to their buyers. They explored production values by applying
techniques which include modularization, raw material review, production methodology, and family of
parts compatibility. They provide value engineering to achieve cost benefits to their customers.
4
28 Jan 2016
Trading Idea – Kerjaya Prospek Group Bhd
JF APEX SECURITIES
They have been delivering lighting solutions to their customers with over 25 years extensive experience in
manufacturing of lighting products includes both indoor and outdoor lighting products which embody
design, quality and innovation by the group‟ Advance Industries Sdn Bhd and Acumen Marketing Sdn Bhd.
Both the subsidiaries have been involved in many projects over the years and are well-known in the
industry for delivering high standard lighting products, timely delivery and quality service. Meanwhile their
other subsidiary, Lighting Louvres Manufacturing Sdn Bhd, serves international customers through the
supply of products to OEM manufacturing services. They got ISO 9001:2008 Quality Management System
Standards certified that served as a commitment in quality and customer satisfaction. Besides that, the
group have emphasized on research and development to apply design technologies that often parallels
project briefs and specifications which serve as a platform for customization, flexibility and timely delivery
without compromising on quality
Future plans and business strategies
The group intended to expand by acquiring two construction companies namely Kerjaya Prospek Sdn bhd
and Permating Bakti Sdn bhd which involve in construction works and project management. The
acquisition will see an injection of RM2.74b order book to the group. The enlarged order book should
keep the group busy from FY16-FY18. In addition, the management has changed its name from Fututech
Berhad to Kejaya Prospek Group Berhad (with effect from 21 January 2016) given that the valuable brand
name of Kejaya Prospek which has built its reputation and good name among industry players in premium
residential property. Looking forward, the group is able to leverage on the brand name to secure big
projects and gain larger market share in the industry.
The group has recently launched its property development project in Gohtong Jaya. A fully furnished
service apparent with 378 units and 28 retail units. The Gross development value of this project is
RM300million and target to be completed by 2018. Property development enables the group to generate
synergy from its expertise in construction and manufacturing activities. In the pipeline, there is another
project with a GDV of RM200m to be launch, namely Monterez with 349 units of apartments. Looking
forward, the group will continue to explore premium residential property development to generate higher
profit for shareholders.
On the other hand, manufacturing activities will continue to contribute and act as a source of turnover for
the group. Meanwhile, research and development is carrying out as an ongoing basic to ensure the edge
and continue create synergy for the construction and property activities.
In a nutshell, the group has gained edge as a contractor in premium residential property construction by
its vast experience and well-established networks integrated with the in house manufactured kitchen and
lighting products that further enhance the overall value. All in, the group has cards on hand to explore
property development chances to bring in lucrative earnings for the group.
5
28 Jan 2016
Trading Idea – Kerjaya Prospek Group Bhd
JF APEX SECURITIES
Figure 4: Project List/Orderbook as at 31 March 2015 for Kerjaya Prospek (M) Sdn Bhd and
Permatang Bakti Sdn Bhd
Source: Company, JF Apex
Figure 5: Property Development
Source: Company, JF Apex
6
28 Jan 2016
Trading Idea – Kerjaya Prospek Group Bhd
JF APEX SECURITIES
Corporate Exercises
Currently, there are 3 major corporate exercises being undertaking by the group:
1.) Proposed acquisition of the entire equity interest in Kerjaya Prospek (M) Sdn Bhd (KPSB) for a
purchase consideration of RM 438m and proposed acquisition of the entire equity interest in
Permatang Bakti Sdn Bhd (PBSB) for a purchase consideration of RM 20m.
2.) Proposed private placement of up to 100,000,000 new ordinary shares of RM0.50 each in Kerjaya
Prospek Berhad.
3.) Proposed increase in the authorized share capital of Kerjaya Prospek Berhad from RM150m
comprising 300m Kerjaya Prospek Berhad shares to RM800m comprising 1200m Kerjaya Prospek
Berhad shares and 400m Redeemable Convertible Preference shares of RM0.50 each in Kerjaya
Prospek Berhad.
Highlights of the corporate exercises
Purchase 100% equity stake in KPSB cost
Proposed manner of payment:Issuance of New Fututech Share (36,896,552) at an issuance price of RM1.16
Issuance of New RCPS of RM0.50 each in Fututech (310,344,282) @ of RM1.16
Cash
RM438m
Purchase 100% equity stake in PBSB cost
Proposed manner of payment:Cash
RM20m
RM42.8m
RM360m
RM 35.2m
RM20m
Proposed Private placement
Proposed Private Placement entails the issuance of up to 100m new Kerjaya Prospek Berhad shares at an
issuance price to be determined and to placee(s) to be identified at a later stage via direct placement to
raise funds for the proposed injection and to meet the Kerjaya Prospek Berhad‟s working capital
requirements arising from its increasing order book.
Based on illustrative issue price of RM1.35 per placement share, the proposed will raise gross proceeds of
up to RM135m.
The proposed utilization of proceeds is as follows:
Proposed Injection
RM55.2m
Working Capital
RM73.78m
Estimated expenses for the proposals
RM6.02m
Total
RM135m
7
28 Jan 2016
Trading Idea – Kerjaya Prospek Group Bhd
JF APEX SECURITIES
Impact of the corporate exercises:
No. of Ordinary
Shares
Share Capital
Share
Premium
('000)
RM'000
RM'000
Audited as at 31/12/2014
Effects of conversion of Warrants
90,737
45,369
-
986
493
374
91,723
45,862
374
36,898
18,449
24,351
128,621
64,311
24,725
100,000
50,000
100,000
228,621
114,311
120,970
Effects of full conversion of the KPSB consideration RCPS
310,345
155,172
204,828
Pro Forma enlarged share based
538,966
269,483
269,483
Effects of proposed acquisitions
Effects of proposed private placement
Estimated expenses related to the proposed private placement
Source: Company circular, JF Apex
(3,755)
Investment merits
We derive our fair value of RM2.11 for Kerjaya Prospek Group Bhd (KPGB) by pegging at PER
of 11.50x FY16 EPS. The target PE assigned is at the range of upcycle PE for small-and-mid cap
contractors amid current booming construction industry. Hence, our fair value renders 20.5% upside from
the closing price of RM1.75. We favour KPGB as it is a niche construction player in premium high-rise
building segment which differentiates itself with others in respect of work scope and job margin.
Kerjaya Prospek Group Bhd (Previously known as Fututech Bhd, has officially changed its
name w.e.f. 21 January 2016) was originally focusing on design, manufacturing and marketing of both
lighting production and premium kitchen cabinetry. Over the years, the Group has diversified into building
construction and property development, project management, interior fit-out and miscellaneous
construction related services for premium residential property. With the recently approved acquisition of
Kerjaya Prospek Sdn Bhd and Permatang Bakti Sdn Bhd, this enables the Group to enlarge its construction
order book to RM2.7b, lifting its future earnings substantially.
Superb construction margin – During FY2012 to FY2014, Kerjaya Prospek Sdn Bhd (the target
acquiree) has marked an average PBT margin of 11% and net margin of 8% (against industry average of
9% PBT margin and 6% net margin) with FY14 PBT margin of 13.6% and net margin of 10.3%
respectively. We understand that the superb margin achieved was mainly attributed to the vast experience
and skill knowledge of the management team to carry out its construction project effectively. Firstly, the
company developed its own systematic flows in construction progress and procurement that yield better
quality yet less time-consuming. Secondly, the company gained competitive edge by purchasing raw
material in cash that entitled for better price and in better bargaining position when paying subcontractors in cash. Thirdly, the company maintained its in-house trained labour force of c.3000 workers,
mainly Indonesian, to ensure delivering high standard of workmanship and timely handover given full
control of workforce. Thus, we expect the Group continues to strike superb margin moving forward base
on existing strength and management team upon completion of the acquisition of the target acquiree.
Sustainable earnings growth underpinned by sizeable current orderbook……. Judging from the
sizeable orderbook of RM2.7b which provides earnings visibility till FY2018, we believe KPGB would not
have any difficulty to achieve its RM150m cumulative profit guarantee over the next three years with
estimated net margin of 5-6% arising from the acquisition of the two privately owned companies.
……….and target orderbook. We are optimistic on its yearly orderbook replenishment of RM500-600m
despite market concern on KPGB‟s heavily relying on its three major customers, i.e. SP Setia, E&O and
EcoWorld for future contracts coupled with current slowing property market. We are unfazed by this high
customer concentration risk and prevailing property market condition as these three customers are well
established and reputable property developers in town with bread-and-butter township projects to sustain
their future launches and sales target. In addition, KPGB has close rapport with the abovementioned major
8
28 Jan 2016
Trading Idea – Kerjaya Prospek Group Bhd
JF APEX SECURITIES
customers (EcoWorld is currently run by the former SP Setia‟s management team) with more than 10
years working relationship. Based on our preliminary calculations, each of these three major customers
targets minimum yearly new sales of about RM0.5-2b which translates into easily RM600m-750m yearly
new contracts for KPGB based on the Group‟s success rate of bidding of 20-25%.
Diversifying into property development – We are positive with KPGB venturing into property
development to further complement its existing businesses. In view of the Group's ability to manage and
control construction costs effectively as a main contractor, moving up in the value chain will improve and
enhance the long-term outlook for the Group with its planned projects in Gohtong Jaya, Genting Highlands
(GDV of RM300m which was launched recently) and the Monterez Golf Club, Shah Alam (GDV of RM200m
with target launch yet to be confirmed). In realising the current softening property market, KPGB adopts
„quick-turnaround‟ strategy by developing a small piece of landbank, preferably JV with landowner in order
to free up more cash flow as property development business is capital intensive in nature.
Favourable input cost on the back of cheaper raw material prices – In view of the relatively lower
prices in steel bar, cement and fuel cost as compared to past few years, KPGB shall be able to benefit
significantly from the lower construction and transportation costs in anticipation of margin expansion going
forward. However, the benefit only flowing into current order book secured, i.e. the RM2.7b works as
bidding of new projects are based on prevailing raw material prices and hence the Group may not benefit
fully on the cost saving stemming from the cheaper raw material prices.
9
28 Jan 2016
JF APEX SECURITIES
Trading Idea – Kerjaya Prospek Group Bhd
Financial Review and Outlook
(RMm)
Revenue
2012
158.2
% YoY
2013
42.0
2014
62.3
2015F
80.5
2016F
1125.6
2017F
1399.4
2018F
1552.6
-73.4%
48.2%
29.3%
1298.4%
24.3%
11.0%
Construction
155.3
36.1
54.0
63.3
1066.7
1233.3
1400.0
% of Sales
% YoY
98.2%
85.9%
-76.8%
86.8%
49.7%
78.6%
17.1%
94.8%
1586.2%
88.1%
15.6%
90.2%
13.5%
Manufacturing
2.9
5.9
8.2
12.1
13.9
16.0
17.6
% of Sales
% YoY
1.8%
14.1%
106.8%
13.2%
39.1%
15.1%
47.0%
1.2%
15.0%
1.1%
15.0%
1.1%
10.0%
45
4.0%
135
8.7%
-18.9%
1125.91
274.1
Property
COGS
Gross profit
127.508
30.7
25.941
16.1
39.13
23.1
57.38
23.1
873.89
192.8
150
10.7%
168.1%
983.03
250.3
GP Margin
Other income
Admin.
expenses
19.4%
1.968
38.2%
2.61
37.1%
1.15
28.7%
1.169
17.1%
1.000
17.9%
1.000
17.7%
1.000
% of Sales
% YoY
6.338
3.245
3.242
3.396
51.78
64.37
71.42
% of sales
4.0%
7.7%
5.2%
4.2%
4.6%
4.6%
4.6%
Other expenses
1.477
0.37
0.62
EBIT
% YoY
24.815
15.049
-39.4%
20.415
35.7%
20.887
2.3%
142.00
579.9%
186.94
31.6%
203.67
8.9%
EBIT Margin
Dep. Add back
15.7%
1.287
35.8%
1.004
32.8%
1.042
25.9%
1.191
12.6%
22.512
13.4%
27.987
13.1%
31.053
% of Sales
0.8%
2.4%
1.7%
1.5%
2.0%
2.0%
2.0%
EBITDA
% YoY
EBITDA Margin
26.10
16.5%
16.05
-38.5%
38.2%
21.46
33.7%
34.5%
22.08
2.9%
27.4%
164.52
645.2%
14.6%
214.92
30.6%
15.4%
234.72
9.2%
15.1%
1.005
23.81
15.1%
0.4
0.3367
14.71
35.0%
3.552
0.2702
20.14
32.4%
5.331
0
20.89
25.9%
5.709
0
142.00
12.6%
38.341
0
186.94
13.4%
50.473
0
203.67
13.1%
54.990
1.7%
24.1%
26.5%
27.3%
27.0%
27.0%
27.0%
Profit after
tax
23.41
11.16
14.81
15.18
103.66
136.46
148.68
PAT Margin
14.8%
26.6%
23.8%
18.9%
9.2%
9.8%
9.6%
0.041
0.020
0.026
0.027
0.184
0.242
0.263
564.63
42.21
1.75
564.63
88.54
1.75
564.63
66.70
1.75
564.63
65.10
1.75
564.63
9.53
1.75
564.63
7.24
1.75
564.63
6.65
1.75
Finance costs
PBT
PBT Margin
Tax expenses
Effective tax
rate
EPS (after all-in)
Enlarged share
based
PE Ratio
Share price
Forecasting assumptions
Injected Orderbook to
recognize across
FY16-FY18 with replenish
500m/yr
Major revenue contributed by
construction
Expect to grow 15% yoy
Property revenue starts to kick
in FY16
GP Margin goes down in line
with higher portion revenue in
construction
See a strong growth in EBIT
after orderbook injection
EBIT Margin goes down in line
with higher portion revenue in
construction
Currently, company does not
have any debt financing
A favorable net margin is in
line with
Superior margin achieved by
Kerjaya Prospeck Sdn Bhd
PE is based on last closing
Price of 1.75
Source: Company, JF Apex
10
28 Jan 2016
Trading Idea – Kerjaya Prospek Group Bhd
JF APEX SECURITIES
Risk
The major risk will be prolonged and further deterioration in property industry. This would
affect the future order book replenishment for the Group especially for premium residential property
projects. However, we see the risk is not imminent given the current order book which will keep the
Group busy for the next 3 years. Besides, given the efficiency of KPGB in carrying out construction
activities and vast experience of the management, this shall help the Group to sustain its profit margin
and therefore its future earnings.
Valuation/Recommendation
Our fair value for KPGB (Not Rated) is at RM2.11 based on PER of 11.50x of FY16 EPS. The
target PE assigned is at the range of upcycle PE for small-and-mid cap contractors amid current booming
construction industry. We like the Group for its: a) superb margin deriving from its construction jobs; b)
sizeable outstanding orderbook; c) clear earnings visibility underpinned by long-term working relationship
with the reputable developers; and d) further topline and bottomline boosts from the property
development venture.
11
28 Jan 2016
Trading Idea – Kerjaya Prospek Group Bhd
JF APEX SECURITIES
Technical Analysis
Source: Bloomberg
Comment:
Resistance:
Support:
(R1) RM1.84 / (R2): RM1.99
(S1) RM1.62/ (S2): RM1.51
Share price of Kerjaya Prospek Group Bhd (Previously known as Fututech Bhd) embarked on uptrend
after hitting a low at RM 1.18 in August 2015. In November 2015, share price continued its momentum
and crossed above its 50-day and 200-day moving average with a spike in volume. Technical indicators
are mixed as the RSI hovered below the overbought zone while the MACD moving closer to its signal line.
Immediate outlook remains positive as share prices remained in its uptrend channel while the SMA50
traded above SMA100.
A decisive breakout would take place if the share price closes above its resistance level of RM1.80. First
target would be RM1.84, measured by 100% Fibonacci projection. Second resistance level would be
RM1.99 based on 123.6% Fibonacci projection line. Immediate support would be pegged at RM1.62 level
where 50-day moving average stood and traders are advised to cut loss upon share price closed below
RM1.51.
12
28 Jan 2016
JF APEX SECURITIES
Trading Idea – Kerjaya Prospek Group Bhd
JF APEX SECURITIES BERHAD – CONTACT LIST
JF APEX SECURITIES BHD
DEALING TEAM
RESEARCH TEAM
Head Office:
6th Floor, Menara Apex
Off Jalan Semenyih
Bukit Mewah
43000 Kajang
Selangor Darul Ehsan
Malaysia
Head Office:
Kong Ming Ming (ext 3237)
Shirley Chang (ext 3211)
Norisam Bojo (ext 3233)
Head Office:
Lee Chung Cheng (ext 758)
Lee Cherng Wee (ext 759)
Norsyafina binti Mohamad Zubir (ext 755)
Low Zy Jing (ext 754)
General Line: (603) 8736 1118
Facsimile: (603) 8737 4532
PJ Office:
15th Floor, Menara Choy Fook On
No. 1B, Jalan Yong Shook Lin
46050 Petaling Jaya
Selangor Darul Ehsan
Malaysia
Institutional Dealing Team:
Lim Teck Seng
Sanusi Bin Mansor (ext 740)
Fathul Rahman Buyong (ext 741)
Ahmad Mansor (ext 744)
Zairul Azman (ext 746)
PJ Office:
Mervyn Wong (ext 363)
Azfar Bin Abdul Aziz (Ext 822)
Tan Heng Cheong (Ext 111)
General Line: (603) 7620 1118
Facsimile: (603) 7620 6388
JF APEX SECURITIES BERHAD - DISCLAIMER
Disclaimer: The report is for internal and private circulation only and shall not be reproduced either in part or otherwise without the prior
written consent of JF Apex Securities Berhad. The opinions and information contained herein are based on available data believed to be
reliable. It is not to be construed as an offer, invitation or solicitation to buy or sell the securities covered by this report.
Opinions, estimates and projections in this report constitute the current judgment of the author. They do not necessarily reflect the opinion of
JF Apex Securities Berhad and are subject to change without notice. JF Apex Securities Berhad has no obligation to update, modify or amend
this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate
set forth herein, changes or subsequently becomes inaccurate.
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