KUALA LUMPUR (Nov 26): AllianceDBS Research has maintained its Buy rating on IJM Corporation Bhd at RM6.70 with an unchanged target price of RM7,75 and said IJM Corp’s 2QFY15 net profit of RM112 million takes 1HFY15 net profit to RM245 million, in line with estimates.
In a note Wednesday, the research house said IJM Corp’s 1HFY15 core pretax profit grew 22% year-on-year (y-o-y) to RM497 million (after stripping out RM56.5 million gain from the sale of Trichy highway in 1HFY14).
It said although 2QFY15 construction revenue fell 55% y-o-y to RM221 million, pretax profit jumped 49% to RM47 million as IJM Corp had finalised accounts for some local projects and there was favourable forex movement.
AllianceDBS Research said IJM Corp’s outstanding orderbook stands at RM5.1bn including “The Potpourri” commercial development in Ara Damansara worth RM456 million.
It said the anchor project was the West Coast Expressway, where IJM Corp had won RM2.8 billion worth of jobs out of a total value of RM5 billion.
“The supplementary CA is at the final stage and physical work should start by 1QCY15.
“IJM Corp’s orderbook could reach RM6.6 billion by year end, including Kuantan Port Phase 1 and a LOI for a building job worth RM400 million.
“Its construction division is on solid footing now, especially with the benign raw material prices. The quality of peak orderbook now will also be stronger than in 2007 as back then half of the orders were overseas jobs and raw material prices were higher,” said the research house.