KUALA LUMPUR (Feb 24): CGS-CIMB Securities has maintained its “add” rating on IJM Corp Bhd at RM1.58 with an unchanged target price of RM2.15, and said IJM’s 9MFY3/23 results were broadly in line, with strong core net profit growth.

In a note on Friday (Feb 24), the research house said softer construction earnings were due to weaker billings for new projects but offset by higher pretax margin for property development.

CGS-CIMB said that the group’s new contracts target of RM3 billion for FY2023F is intact.

It said this suggests that, with the RM1.4 billion total new wins in 1HFY2023, the group could secure additional RM1.6 billion worth of new wins in 4QFY2023.

“We believe key targeted projects are: 1) additional scope for the East Coast Rail Line, ECRL; 2) government/private sector building contracts; 3) new tenders in India; and 4) MRT 3 (Circle Line), for which it tendered for all three civil works packages (estimate at RM3 billion to RM13 billion each).

“Total 9MFY2023 outstanding order book stood at RM4.6 billion. Separately, we gathered that the group’s highway restructuring proposal for Besraya Highway, Lekas Highway and New Pantai Expressway remains in play and could regain traction in the coming months, following the retabling of Budget 2023.

“Maintain ‘add’ rating with unchanged TP (10% discount to RNAV). Contract flow outlook could improve following (the) retabling of Budget 2023,” it said.