PETALING JAYA: IJM Corp Bhd
could potentially secure more data centre (DC)-related jobs moving forward, says RHB Research.
In a report, the brokerage firm said it observed the progress of IJM’s DC jobs and takes comfort from the group’s reliability to deliver in a very timely manner.
To date, IJM has about RM5.1bil worth of DC-related contracts spanning across seven work packages – three in the Klang Valley and four in Johor – for various DC developers and hyperscalers.
Out of IJM’s balance domestic construction order book estimated at around RM8.2bil, RHB Research highlighted that “about 45% to 50% comes from DC jobs compared with Sunway Construction Bhd’s DC order book exposure, which makes up around 50% to 60% of the total group outstanding order book.”
It also noticed that the topping process took place about 12 months after the award for IJM’s DC job in Iskandar Puteri.
It realised that the topping process was reached at a shorter timeframe about eight to 10 months for the three subsequent DCs in Gelang Patah, Tanjung Kupang and Mukim Pulai in Johor.
“This indicates IJM’s DC jobs can be executed well within the stipulated timeline as there are roughly another five to 10 months left for the DC to be fully constructed post-topping process for the DCs in Tanjung Kupang and Mukim Pulai,” it added.
On the medium-term prospects for IJM in the DC space, RHB Research cited that for the RM1.4bil DC being constructed in Mukim Pulai, the contract was awarded in August last year, with the topping ceremony taking place in April and the completion targeted by third quarter of this financial year (FY26).
The research house said it understands that there are another three blocks of DCs to be constructed in the same area.
Therefore, if IJM delivers this first DC block well, RHB Research expects a higher chance for the group to be selected for the upcoming DC blocks to save mobilisation costs.
In addition, IJM’s industry division is a strong complementor for DCs, the brokerage noted.
The industry division represented by spun piles manufacturing and industrialised building system (IBS) amongs others, contributed 24% of FY25 pre-tax profit.
IJM’s IBS arm deployed its Precast Bubbledeck slab system across a 14.5 km sq m supply area where structural works reached the roof section in less than five months (conventional way: up to nine months) for the Elmina Business Park DC.
Meanwhile, RHB Research said it has cut IJM’s FY26 to FY28 earnings by 12%, 6%, and 2% as “we impute a more conservative profit projection for IJM’s property arm”.
“We view our numbers post nine-month FY26 results as still optimistic, given that nine-month FY26 saw a loss before tax of RM7.7mil versus a RM241mil pre-tax profit in nine-month FY25,” it added.
The brokerage has kept a “buy” call on IJM with a new target price of RM3.20 per share.
The catalysts for IJM may come in the form of sizeable DC wins while the key downside risks include sluggish job replenishment trends.
