AmResearch maintains "Buy" on IJM, raised FV to RM6.95

PETALING JAYA: AmResearch maintained a “Buy” on IJM Corporation Bhd with a higher fair value to RM6.95 from RM5.71. “IJM reported financial year 2013 results that were in-line with expectations. The group declared a second interim dividend per share (DPS) of 9 sen (single-tier), taking full-year DPS to 13 sen (net yield of 2%),” it said. The research house said it had estimated IJM's net profit to increase about 3% on-year at RM438mil but its gains for the construction and property divisions were largely offset by lower plantation earnings. “Plantation earnings fell by 27% on-year on faltering fresh fruit bunches volume coupled with lower crude palm oil prices realized which was at RM2,620/mt in 2013 vs RM3,049/mt a year ago,” it said. It said for IJM's financial year 2014, the research house expects greater orderbook visibility post elections mainly the West Coast Expressway project where IJM is a strong contender. “IJM Land's strong pipeline of new launches is well positioned to benefit from an expected return of buying interest post-elections. The maiden launch of Bandar Rimbayu last month was already a roaring success,” it said. AmResearch noted with a market capital touching RM8bil, IJM is a liquid proxy that should benefit from a return of foreign investor interest in the Malaysian contractor.