KUALA LUMPUR (Sept 3): KJTS Group Bhd (KL:KJTS) rose on Thursday as investors cheered contract wins in Thailand and analysts raised their outlook on the engineering services company.
Kenanga Investment Bank and Malacca Securities raised their target price among the four research houses covering the stock. The latest contracts further expand KJTS’ recurring energy services base, Malacca Securities said in a research report.
“We believe the combination of long-duration operation and maintenance income and chilled water supply should further improve earnings visibility, while the variable fee component provides scope for revenue upside as chilled water demand increases,” the house said.
KJTS shares climbed more than 9% to hit an intra-day high of RM1.19 before paring gains. The counter closed four sen or 3.67% higher at RM1.13 for a market capitalisation of RM780.5 million.
Shares of KJTS have gained nearly 30% since July, but have yet to recover from a sharp selldown near the end of January that erased nearly half of its market capitalisation in just days. The stock enjoys ‘buy’ calls from all four houses with an average target price of RM1.27, according to Bloomberg.
On Wednesday, KJTS announced 20-year agreements to provide retrofit works, operation and maintenance services as well as chilled water supply to four hotels in Thailand operated by Central Plaza Hotel PCL.
The contracts could be worth up to RM71.7 million over 20 years, with the variable component potentially adding as much as 50% on top of the fixed monthly service fees, according to CIMB Securities’ estimates.
The continued project wins from Central Plaza also strengthen KJTS’s track record with this client and could open further opportunities across its sizeable property portfolio that spans more than 2,100 properties globally, the research house added.
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