RHB Research said the group is set to soar on many fronts.
PETALING JAYA: Analysts are generally positive about IJM Corp Bhd
’s prospects with the group strengthening its presence in industrial projects, improving presence in Sarawak, potentially breaking ground in Indonesia and new highway jobs.
RHB Research, in a report, said the group is set to soar on many fronts. IJM’s outstanding order book stands at RM7.3bil.
In the financial year 2024 (FY24), IJM witnessed an uptrend in its order book, especially after clinching the RM1.1bil job for the customs, immigration, and quarantine complex for the Rapid Transit System Link in Johor in October 2023.
This also coincided with IJM’s new job wins reaching RM3.7bil, which is the highest in six years.
Other key wins in FY24 and year-to-date FY25 are industrial buildings such as semiconductor facilities and warehouses, which represented 20% to 30% of the order book, said RHB Research.
Meanwhile, IJM has made inroads into Sarawak via its contract for the Sarawak Metro’s Kuching Autonomous Rapid Transit (Kart) project for the full works of the Rembus depot via a joint venture with Azam Sehasrat and Unique Deco worth RM260mil in December 2023.
“We do not discount the possibility of IJM eyeing the remaining packages of Kart such as the Blue Line package two, which had the tender submission deadline on June 18.
“Moreover, its property arm IJM Land has inked a deal with Sarawak Metro and Liang Court Wanisara for the construction of a new linkway to a station along the Blue Line, signifying the group’s persistence to gain a footprint in the state,” RHB Research noted.
According to the research house, other upcoming catalysts will be Sarawak and Indonesia, particularly the new capital, Nusantara via a civil servant housing project worth about RM1bil.
IJM had also teamed up with Permodalan Negeri Selangor Bhd and Lim Seong Hai Capital Bhd to study viable connectivity routes focused in the southern Selangor integrated regional development area, which may give rise to new highway projects.
RHB Research has kept a “buy” call on the stock with a new target price (TP) of RM4.34 from RM3.60 previously.
Meanwhile, CGS International (CGSI) Research, in a note, said IJM’s maiden RM332mil data centre (DC) contract win from Telekom Malaysia Bhd (TM) in Johor might be a precursor for more jobs in this space.
The group is planning to bid for TM and Singtel’s larger hyper-connected artificial intelligence-ready DC campus in Johor with an initial capacity of 64MW.
“Assuming conservative costs of RM30mil/MW, we estimate this could amount to RM1.9bil in terms of project value.
“Our channel checks indicated that the tender would be called this year,” added the brokerage firm.
The group’s year-to-date wins stood at RM1.3bil and it is on track to achieve its RM5bil target for FY25, said CGSI Research.
Hence, the brokerage firm has reiterated an “add” call on the stock with a higher TP of RM4.40.
The rerating over the past year has been driven by earnings upgrades, said CGSI Research.
“We think a rerating is imminent as its construction and synergistic spun piles business should put it in good stead to clinch more data centres.”
