PETALING JAYA: Analysts have reduced their target price for IJM Corp Bhd
and lowered their financial year ended March 31, 2025 (FY25)-FY27 core profit targets for the group following a cut in new order book assumptions.
CIMB Securities Research said it reduced its target price by 17% to RM3.26 and lowered its FY25–FY27 core profit estimates by 1%-2%, factoring in a 33% cut in FY25 new order book assumptions to RM2.7bil.
“However, we maintain our buy call on IJM as order book growth is set to resume in FY26 with an unchanged new
contract win forecast of RM4.5bil (+67% year-on-year).
"Trading at a steep 53% discount to its revised sum-of-the-parts, further valuation support will come from share buybacks and decent FY25–FY27 dividend yields of 3.4%–4.4%.”
At last look, IJM was at RM2.06 apiece.
CIMB Research pointed out that in a statement, IJM had strongly refuted false and malicious allegations that have been circulating online recently regarding the group and its leadership.
As a public listed entity, IJM emphasised its commitment towards strict corporate governance, regulatory compliance, and competitive bidding based on the group’s capabilities and track record, it noted.
“IJM clarified that its chairman is a non-executive director with no executive authority over the group’s operations. In addition, IJM clarified that claims about the former CEO’s resignation are false; he opted for early retirement, which was approved by IJM’s board.”
Addressing the MRT 3 project, IJM stressed that the tender process was open and competitive, attracting the participation of major Malaysian and foreign contractors, CIMB Research said.
“IJM said that the tender process, which was conducted transparently, has now been called off following the government’s deferment of the project. In response to the misinformation, IJM has reported the matter to the Malaysian Communications and Multimedia Commission and may take legal action if deemed necessary.”
The research house said operationally, IJM’s core fundamentals remain intact with a clear focus on project delivery and value accretion.
However, with less than one month before the current financial year closes, there is a strong likelihood that group will underdeliver on its new order book target of RM5bil, it said.
“The order book miss for FY25 is largely attributed to delays in the award of two key job prospects: the Nusantara public housing project, and New Pantai Expressway (NPE) extension.”
CIMB Research said heading into FY26, it surmised that order book prospects for IJM appear brighter; negotiations for the NPE extension, which it estimates to cost RM1.4bil, may be concluded in two months’ time once all relevant approvals are duly received.
“NPE 2 forms part of KL city’s development plan, acting as a traffic dispersal system that enables connectivity with other highways.”
CIMB Research also noted that IJM had expanded its presence in the UK via Royal Mint Gardens Phase 2 and the newly acquired Finsbury Circus building.
