PETALING JAYA: IJM Corp Bhd
is riding the data centre boom, with such jobs now accounting for nearly half of its order book and more contract wins expected ahead.
CGS International Research (CGSI Research) said data centre jobs now contribute 43% of IJM’s order book of RM9.1bil, while it has a tender book of RM17bil comprising mainly data centres, and commercial and industrial buildings.
On April 1, IJM announced a contract from Sime Darby Property Bhd for the Package 2 main building works of a hyperscale data centre in Elmina Business Park, Selangor worth RM658mil.
This is an extension of the main building works for its previously secured core and shell works in Elmina worth RM1.3bil, which is the Package 1 awarded in October 2025.
Notably, the RM658mil contract is IJM’s first win for financial year 2027 (FY27) and the group’s seventh data centre package win.
The contract does not include mechanical and engineering (M&E) works which will be awarded at a later stage.
“We think IJM should also be a front-runner for this,” said CGSI Research.
Meanwhile, Kenanga Research also believes that there is a “strong chance” of IJM securing a subsequent M&E package from the hyperscaler.
According to the research house, this is because IJM won the M&E portion worth RM874mil for the earlier Package 1 in Elmina.
Moreover, RHB Research estimates the M&E contract for Package 2 to be worth RM500mil to RM700mil.
Looking ahead, RHB Research said potential wins may stem from other data centres in the Klang Valley or Johor.
In addition to these, another potential job would be the civil servant housing contract in Indonesia’s new capital, Nusantara.
A catalyst for the stock would be if IJM becomes involved in infrastructure jobs, namely the RM5bil to RM6bil Penang Light Rail Transit Mutiara Line cross-sea link.
“We gathered that IJM, on March 12, reached the final precast installation stage for one of the buildings related to a RM1.4bil data centre in Mukim Pulai, Johor – for which it secured the job order back in August 2025.
“This data centre has a completion timeline of 13 months, and works are expected to be done by September. We believe that meeting this deadline is achievable,” RHB Research said in a note.
Hong Leong Investment Bank Research (HLIB Research) pointed out that IJM’s swelling order book is set to boost its construction billings in the coming quarters, driven by its growing presence in quick-turnaround hyperscale data centre jobs.
“Management guided that construction profit before tax margin could inch up to high-single digit (4.9% in the third quarter of FY26), though we are now a tad cautious on its near-term margin execution following the eruption of the Iran war and subsequent spike in input costs.
“Construction performance has become critical to the group’s earnings growth in the near to mid-term at a time where its property segment is facing headwinds due to weak property sales and elevated incubation costs for UK investment properties,” the research house said.
On the latest Elmina data centre award, HLIB Research foresees the data centre build-outs in Elmina could enhance the chances for IJM to capture a slice of the sizeable one gigawatt data centre pie.
This is barring the probe by the Malaysian Anti-Corruption Commission and execution hiccups.
TA Research said the new RM658mil contract signals that the data centre project pipeline in Malaysia remains resilient despite ongoing global market uncertainties.
This reinforces the research house’s view that demand for data centre-related construction continues to be supported by strong artificial intelligence-driven data consumption and ongoing investments in cloud infrastructure.
“While the pipeline remains robust, we do not discount the likelihood of intensifying competition among contractors, particularly as more players position themselves to capture opportunities within the fast-growing data centre segment.”
