HLIB Research said two positives for the quarter were the group’s construction segment swinging back to profitability and the strong port throughput volumes.
PETALING JAYA: Sector observers are largely bullish on the prospects of IJM Corp Bhd
, citing a positive turnaround in the group’s construction business, as well as a healthy year-to-date (y-t-d) order book.
Hong Leong Investment Bank Research (HLIB Research) reported that IJM’s results for its first quarter ended June 30 (1Q25) for its financial year ending March 2025 (FY25) results were within analysts’ consensus and the research house’s expectations at 19% and 18%, respectively, of the full-year forecast.
IJM posted revenue of RM1.4bil and a net profit of RM86.9mil for the period.
HLIB Research said two positives for the quarter were the group’s construction segment swinging back to profitability and the strong port throughput volumes.
It pointed out that IJM’s FY25 y-t-d wins of RM1.9bil were on track to hit the group’s RM5bil target, with the pipeline likely to be bolstered by the New Pantai Expressway (NPE) 2.0, data centre projects and Penang Light Rail Transit line in Malaysia, and public-housing work in Indonesia.
“Plans to launch RM3.9bil of projects should sustain property contributions while industry division continues to benefit from robust demand,” the research house said in a note yesterday.
UOB Kay Hian Research (UOBKH Research) reported that IJM’s current order book stood at RM7bil, representing 4.2 times cover ratio, with the group recording RM1.9bil in y-t-d replenishments.
“We believe IJM’s construction arm should be well supported by higher progress billings in FY25, with management eyeing a higher replenishment target of RM5bil, compared with RM4bil in FY24,” it added.
The research house said it believed property sales for IJM will pick up significantly in coming quarters given the strong pipeline of launches from 2Q25 onwards.
UOBKH Research said total anticipated gross development value for the group stood at RM3.6bil, spanning 2Q to 4Q25, with IJM previously targeting RM2.2bil in sales for FY25.
Commenting on IJM’s infrastructure segment, the research house anticipated the higher throughput at Kuantan Port to be the main driver for the segment, given the challenging outlook faced by the toll concessions segment dealing with lower traffic and pressure on toll rates.
“On the West Coast Expressway, after stripping out fair-value losses amounting to RM19.9mil, IJM’s share of losses narrowed 8.6% year-on-year (y-o-y) to RM8.6mil from RM9.4mil previously. Currently, the expressway is at 94% completion, with full completion expected by FY26,” the research house added.
Citing WCE Holdings Bhd, UOBKH Research’s report said that six out of 11 sections of the highway had opened for traffic so far with average daily traffic for each section at 120,000 vehicles.
Maybank Investment Bank Research said that IJM was poised to benefit from higher construction and economic activity, which should also overflow to its industrial and port-operation segments.
It kept its “buy” recommendation on the counter with a 12-month target price of RM3.70 per share.
HLIB Research and UOBKH Research also maintained their “buy” recommendations on IJM, with target prices of RM3.64 and RM3.60, respectively.
