MORNING CALL: 16/10/23

The Edge TV

With more clarity on MRT 3 and the ECRL Link to Kuantan Port, CGS-CIMB Research believes IJM will likely beat its RM3 billion new order win forecast for FY3/24F

Transcript

00:00 So, IJM Corp recently clinched a contract for the JB Singapore RTS Link.

00:06 CJSCIMB Research maintains its ad recommendation on the counter, with an unchanged target price

00:12 of RM2.15.

00:14 The stock ended on Friday at RM1.90.

00:17 In its note, CJSCIMB said, "The contract comes with a provisional sum of RM155 million,

00:24 which entails work that has not been identified at the point of the award, so it's estimating

00:29 the win to total RM1.26 billion.

00:32 There is no specific margin guidance for this project, but the research house says pre-tax

00:37 margins should be in the range of 6-9%."

00:40 This job takes its year-to-date wins to RM2.2 billion for FY24.

00:45 This versus IJM's guidance of RM3 billion new order wins for the full fiscal year.

00:50 CJSCIMB's forecast stands at RM3.5 billion.

00:54 It explains that IJM is likely to exceed its target if key contract wins such as the

01:00 circa RM1 billion ECRR contract, packages under MRT3 and projects in Indonesia, India

01:06 and East Malaysia come to fruition.

01:09 It says key catalysts could come from higher-than-expected new order wins in FY24, surpassing IJM's

01:15 RM3 billion guidance, more asset and land monetization, recovery in Kuantan port throughput

01:21 and higher property sales.

01:23 Key downside risks are a prolonged economic slowdown and higher raw material costs, which

01:28 could crimp its margins.

01:30 A look now at consensus.

01:31 According to Bloomberg data, there are 10 buy, 7 hold and 1 sell calls on IJM, with

01:37 an average target price of RM2.

01:39 The counter last closed at RM1.90, so that's a potential upside of some 5%.

01:44 [Music]

Category

Transcript

Recommended