KUALA LUMPUR (Dec 9): IJM Corp Bhd rose as much as 2% on the planned disposal of its 100% stake in India highway concessionaire Jaipur-Mahua Tollway Private Ltd (JMTPL) for INR5.25 billion (RM295 million).
IJM Corp rose as much as 17 sen to RM6.70, before settling flat at RM6.57 at 12.30pm. The stock saw some 1.1 million shares done.
For comparison, the FBM KLCI fell 3.62 points or 0.2%.
Earlier, IJM Corp was one of the top gainers on the exchange.
Yesterday (Dec 8), IJM Corp announced it was selling its 100% stake in JMTPL to ISQ Asia Infrastructure I-A Private Ltd.
IJM Corp is expected to rake in a disposal gain of some RM188 million from the transaction.
Today, MIDF Research wrote in a note that the disposal price of RM295 million, valued the asset at 2.8 times book value of RM107 million.
According to MIDF, the sale proceeds would enable IJM Corp to focus on expanding its highway assets locally.
“Based on our gross estimate discounted future cash flow projection for remaining 16 years, we value the equity value of the asset at a price of RM337.2m, which is about 3.2 times book value.
“Armed with cash, the group is in a good position to benefit from imminent implementation of mega highway projects next year ,” MIDF said.
At this juncture, MIDF retained its earnings forecast for IJM Corp, pending the completion of the deal.
MIDF also maintained its “neutral” recommendation for IJM Corp shares, with an unchanged target price of RM7.20.