IJM Corp construction job wins set to accelerate

CEO Lee said the group has set RM3bil as new order replenishment target for FY24.

PETALING JAYA: IJM Corp Bhd’s construction job wins will likely accelerate in the new financial year ending March 31, 2024 (FY24) after a sluggish performance in FY23.

In an analysts briefing, IJM chief executive officer Lee Chun Fai said the group has set RM3bil as new order replenishment target for FY24.

Potential new wins would include the RM1bil East Coast Rail Link (ECRL) contract to build a spur line into Kuantan Port; three packages under the Mass Rapid Transit 3 (MRT3), where tender validity has been extended till June 2023; and projects in Indonesia, India and Sabah and Sarawak, which appeared more concrete now, CGS-CIMB Research wrote in its report.

The brokerage said while IJM did not meet its new target contract wins of RM3bil for FY23, having achieved new wins of just RM1.5bil, the group’s prospects remained positive.

The underperformance for FY23 was likely due to timing issues.

CGS-CIMB Research reiterated an “add” call on IJM, with an unchanged sum-of-parts-based target price of RM2.15.

“We value its construction division based on a sustainable order book of RM4.5bil, property division at a 40% discount to revalued net asset value and its concession businesses based on discounted cash flow,” the brokerage said.

CGS-CIMB Research said IJM had also set a new property sales target of RM2bil for FY24, adding that the group expected the restructuring of the West Coast Expressway with the government to take place by FY24.

“The divestment of IJM’s toll highways will be different from Gamuda Bhd’s, as IJM will likely not exit completely but still hold an associate stake.”

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