$FAJAR / 7047 (FAJARBARU BUILDER GROUP BHD): A Brighter Future Ahead

FAJAR's building division has recently achieved notable success, securing significant projects such as a RM120.82 million golf club development in Johor awarded by Tanjung Nakhoda and a RM11.04 million preliminary works contract from the Australian Department of Defence. These projects are scheduled to commence in the fiscal year 2024 (ending June 30) and are anticipated to positively impact the company's future earnings and net asset value per share.

FAJAR's order book currently stands at approximately RM1.1 billion, with additional projects in the bidding phase estimated at a total value of RM4.8 billion. This order book represents 4.9 times its FY2023 revenue and 3.4 times its market capitalization. By comparison, Malaysia's largest construction stock by market value, $GAMUDA / 5398 (GAMUDA BERHAD), has an order book that accounts for only 2.9 times its revenue and 1.1 times its market capitalization. Given these figures, FAJAR warrants close attention.

In the realm of property development, FAJAR's strategy is impressive. The company is currently working on the Desa Green project in Kuala Krai, Kelantan, which features single-story terrace houses and single-story semi-detached houses with an estimated gross development value of RM69.8 million. Additionally, in January 2024, FAJAR secured a development contract from Perbadanan Putrajaya for the integrated development project, Residensi Cemara, which includes 480 units of Residensi Madani and 320 units of Residensi Wilayah, with a total gross development value of RM192 million.

FAJAR is also making waves in Australia with its Melbourne-based project, The Wilds, which is set to become the city's first carbon-neutral detached residential development. The project, featuring homes fully powered by electricity and equipped with solar panels, is expected to be completed by the third quarter of 2025.

In the timber and wood trading sector, FAJAR owns approximately 20,468 acres of developable land, which is expected to continue generating revenue for the company in the foreseeable future. In the plantation sector, FAJAR is engaged in agricultural activities on 600 acres of land in Jerantut, Pahang, including reforestation, fruit cultivation, and eucalyptus planting. Furthermore, the eco-farm currently under development in Port Dickson, Negeri Sembilan, is anticipated to open to the public in late 2024, providing a new source of income for the group.

Despite facing challenges such as international conflicts, rising raw material costs, and economic uncertainties, FAJAR's diversified business portfolio and prudent management strategy have positioned the company to navigate these obstacles effectively. By focusing on its four key business areas—construction, property development, timber and wood trading, and plantations—FAJAR is well-positioned to ensure the sustainability of its revenue streams.