MBSB Research said IJM’s management indicated monetisation of its toll division remains a strategic objective.
PETALING JAYA: IJM Corp Bhd
’s disciplined cost management and prudent balance sheet, with net gearing at 0.26 times, provide ample headroom to support future tenders and potential private finance initiatives, analysts say.
MBSB Research noted IJM’s robust local order book of RM9.33bil and expanding exposure to high-margin digital and industrial development, backed by its strong execution track record, puts builder in a good position to capitalise on the ongoing infrastructure and data centre projects and proposals.
An example of this is wholly owned subsidiary IJM Construction Sdn Bhd’s acceptance of a RM1.4bil contract from New Pantai Expressway Sdn Bhd (NPE) to design and build the New Pantai Highway Extension (NPE 2). The 15-km project is scheduled to commence this quarter and is expected to be completed within 48 months or the fourth quarter of 2029 (4Q29).
“IJM has secured RM5.03bil of new jobs thus far for its financial year ending March 31, 2026 (FY26), already hitting the higher end of its FY26 domestic replenishment target of RM3bil to RM5bil. Management continues to target new opportunities across industrial buildings (logistics, semiconductor foundries), the Penang LRT (tender by end of this year), Penang International Airport expansion, Sarawak development projects, and a Merdeka 118 commercial development,” the research house wrote in its latest report on the group that is expanding its overseas presence.
IJM’s total order book including foreign contracts is RM15.2bil and could grow further as its proposed projects in Nusantara, Indonesia, have received design approvals with feasibility approval expected by end of this year, the research house added.
MBSB Research added that IJM’s management indicated monetisation of its toll division remains a strategic objective, with the NPE restructuring serving as a precursor to broader capital recycling efforts.
“Management previously reiterated that any monetisation will not involve full divestment, but rather a partial stake sale to strengthen the balance sheet. Post-monetisation, IJM is expected to explore expansion opportunities abroad,” MBSB Research said.
IJM has stakes in six toll roads: NPE (100% stake), Besraya (100%), Lekas (50%), West Coast Expressway (41%), as well as the Swarnabhoomi Raj Expressway (100%) and Rewa Tollway (100%), both of which are in India.
MBSB Research has maintained a “buy” call on IJM with an unchanged target price of RM3.60 a share, pegged to its FY26 earnings per share of 14.8 sen and price earnings multiple of 24.3 times.
The call is backed by expectations of IJM’s order book replenishment remaining firmly on track, supported by major secured jobs such as the NPE 2 and the Elmina Business Park hyperscale data centre project with further upside from two potential Nusantara contracts currently under feasibility review in Indonesia.
