Positive on IJM Corp on improving presence in Sarawak

KUCHING (July 16): RHB Investment Bank Bhd (RHB Research) remained positive on IJM Corporation Bhd (IJM Corp) on its strengthening presence in industrial jobs, improving presence in Sarawak, potentially breaking ground in Indonesia and getting new highway jobs.

Foreign shareholding level as of end May was 18.6 per cent versus14.8 per cent in Dec 2023. News flow of the Kuala Lumpur-Singapore High Speed Rail should attract foreign investors as IJM is involved in one of the consortiums that submitted a concept proposal to MyHSR Corp in January.

IJM’s outstanding orderbook currently stands at RM7.3 billion – versus the time when balance orders hovered at RM5 billion from FY20-23.

In FY24, IJM witnessed an uptrend in its orderbook, especially after clinching the RM1.1 billion job for the immigration, customs and quarantine complex for the Rapid Transit System Link in Johor in Oct 2023.

This coincided with IJM’s new job wins reaching RM3.7 billion – the highest in six years. Other key wins in FY24 and YTD-FY25 are industrial buildings like semiconductor facilities and warehouses (20-30 per cent of orderbook).

IJM has made inroads into Sarawak via its contract for Sarawak Metro’s Kuching Autonomous Rapid Transit (KART) project for the full works of the Rembus Depot via a JV with Azam Sehasrat and Unique Deco worth RM260 million in Dec 2023.

We do not discount the possibility of IJM eyeing the remaining packages of the KART such as the Blue Line Package 2 which had the tender submission deadline on 18 June.

Moreover, its property arm, IJM Land inked an MoU with Sarawak Metro and Liang Court Wanisara for the construction of a new linkway to a station along the Blue Line – signifying the group’s persistence to gain a footprint in the state.

Upcoming catalysts would be Sarawak and Indonesia (particularly the new capital, Nusantara) via a civil servant housing project worth RM1 billion (outcome likely known by end CY24).

Additionally, IJM has teamed up with Permodalan Negeri Selangor Berhad and Lim Seong Hai Capital to study viable connectivity routes focused in the Southern Selangor Integrated Regional Development area – which may give rise to new highway jobs.