PETALING JAYA: Analysts are positive on IJM Corp Bhd
having bagged a RM1.4bil data centre (DC) job recently, providing the company with strong earnings visibility over the medium-term.
According to MBSB Research, with the inclusion of the latest DC win, IJM Corp construction’s order book has expanded to RM9.2bil as of August, up from RM6.6bil as of March this year.
On Aug 15, IJM Construction Sdn Bhd, a wholly owned subsidiary of IJM Corp, formally executed the letter of acceptance for a new DC project in Johor Baru worth RM1.4bil.
The project comprises the construction of a six-storey hyperscale DC with integrated office facilities, two guardhouses and a waste management and recycling facility in Johor Baru.
MBSB Research pointed out that, including its attributable share in UK-based contractor JRL Group Holdings Ltd and Singapore-based Hexacon Construction Pte Ltd, the broader group order book is estimated at RM13.9bil.
“This supports robust earnings visibility over the medium-term, especially with the bulk of high-margin works expected to mobilise in the second half and financial year 2026 (FY26).
“The order book composition also reflects IJM Corp’s evolving pivot toward higher-value industrial and digital infrastructure, which is expected to offer better margins and faster billing cycles.
“With growing scale in DCs, targeted replenishment across diversified verticals, and international projects such as JRL and Hexacon, we remain optimistic on IJM Corp’s multi-year growth trajectory,” the research house added.
It has maintained a “buy” call on the stock with an unchanged target price of RM3.74, pegged to a price to earnings ratio of 23.2 times on FY26 earnings per share of 16.1 sen, which is in line with its seven-year mean.
The research house said the latest RM1.4bil DC contract falls within IJM Corp’s FY26 replenishment target and was already anticipated, given management’s guidance of five hyperscale tenders above RM1bil in the pipeline.
It added that IJM Corp’s replenishment efforts are off to a strong start in FY26, underpinned by secured jobs such as the New Pantai Expressway extension and the potential award of two Nusantara PFI (government housing) contracts.
The research house expected the first quarter of financial year 2026 results (slated for release on Aug 27) to show a stronger earnings trajectory as new projects begin to gain traction.
“The mushrooming of DC developments also bodes well for IJM Corp, having secured three sizeable DC projects in FY25.
“With a strong replenishment pipeline, growing international exposure, and visible momentum across high-value infrastructure segments, we continue to see IJM Corp as well positioned to capitalise on sector tailwinds,” it explained.
CGS International Research reiterated its “add” call with a target price of RM3.61 as it liked IJM Corp for its strong construction franchise and its synergistic spun concrete piles business.
“In our view, a further win from one of the Pearl Computing tenders, either from the developer or Pearl Computing itself, would be a further re-rating catalyst,” it said.
Maybank Investment Bank Research has also maintained its “buy” call on the counter with a RM3.18 target price, as IJM Corp’s latest job win brings job wins to RM2.8bil year-to-date and outstanding order book to RM9.2bil.
“This gives us comfort that our financial year ending March 31, 2026 job wins assumption of RM6bil is within reach.
“Recall that Pearl Computing is due to award RM10bil of DC contracts this month. We believe IJM Corp is in good stead to win a meaningful percentage,” it added.
