AmInvestment retains Overweight on construction sector

CIMB Research says contractors are beneficiaries of mega projects, such as the Mass Rapid Transit phases one, two and three, Pengerang and the high-speed rail linking Kuala Lumpur to Singapore

KUALA LUMPUR: AmInvestment Research has maintained its Overweight call on the construction sector following the award of four work packages for the Mass Rapid Transit (MRT) Line 2 worth RM4.2bil by MRT Corp.

The research house said on Friday that it was also maintaining its Buy call on Econpile Bhd, Ikhmas Jaya Bhd and Kimlun Corp Bhd on expectations that the companies will be awarded further jobs under the MRT Line 2 project.

It estimated that RM22bil worth of packages have been awarded thus far, out of the total RM32bil value.

There are 66 work packages for MRT Line 2.

“We opine that select viaduct contractors of MRT Line 1 stand a good chance to secure the remaining viaduct packages for MRT Line 2.

“We also like specialist contractors such as Econpile and Ikhmas Jaya to secure piling jobs, and Kimlun Corp to supply segmental box girders given their track record in MRT Line 1.

“Ikhmas Jaya is also pre-qualified with a German partner to bid for rail works,” it said in a note.

On Thursday, MRT Corp awarded four work packages for MRT Line 2 worth RM4.2bil.

Malaysian Resources Corporation Bhd (MRCB), IJM Corporation Bhd and Apex Communications were among the local companies which were awarded part of the contracts for building the MRT Sungai Buloh-Serdang-Putrajaya (SSP) Line 2.