IJM

[winston]

Not vested

Valuation/Recommendationï‚·

Maintain SELL with higher target price of RM2.85 after rolling over the valuation to 15x FY13F PE.

Although the current price is trading slightly lower than our fair value, we see no immediate catalyst for share price to perform given the expected weakening of CPO prices.


Source: UOBKH

[winston]

Not vested

IJM Corp [IJM MK] - Neutral : 4Q11:
Hold your horses,Reported earnings below expectations ( RM6.2 / PT: RM6.25 )
Tanuj Shori; Muzhafar Mukhtar

IJM's 4Q11 result of a RM20.2mn net loss was much below our forecast and Street estimates of RM75-90mn, mainly due to lower construction revenue, project losses on completion, increased provisions against contractual claims and receivables, as well as FRS 139.

Adjusted for these, 4Q11 earnings actually came in at RM108mn.

We maintain our NEUTRAL stance on the stock but may revise our estimates and target price downwards.

These results reaffirm our view that Malaysian construction sector has run ahead of fundamentals and risk/reward looks unfavourable.


Source: Nomura

[winston]

not vested

IJM Corp (Share Price: RM6.70; TP: RM7.85)

The group is poised to triple its orderbook this calendar year, supported by two key projects: West Coast Expressway (RM5bn) and Kuantan Port Phase 1 (RM1.4bn).

There may be upside to our earnings from more buoyant contract wins and higher CPO prices.

Every RM500m in new wins and every RM100 increase in average CPO price (per tonne), would each lift FY15F earnings by 3%.

Source: DBS

[winston]

Strong port and construction earnings

In-line 1QFY18 results
Key highlights – Strong throughput for Kuantan Port and better construction earnings
YTD wins of RM451m (15% of forecast)
Maintain HOLD and SOP-based TP of RM3.50

Maintain HOLD rating and TP of RM3.50. We maintain our HOLD rating and TP of RM3.50 (based on SOP) on IJM.

We believe better earnings delivery and to a lesser extent new order win flows could act as key re-rating catalysts for the stock.

This is evidenced by the fact that its recent win for a building job from UOB had a limited impact on its share price. In our view, there is little room for earnings to surprise on the
upside given the higher depreciation and amortisation charges for its new concessions
(Kuantan Port and WCE) that it needs to incur going forward.

Source: Alliance DBS

[winston]

Strong Rebound in Cargo Throughput

Outlook

We expect to see a stronger performance in the construction division going forward, supported by strong outstanding construction order book of about RM8.7bn.

While we expect the outlook for the property market to remain challenging, we expect the group would be able to maintain its performance, supported by unbilled property sales of RM1.7bn, which was unchanged compared with the number a quarter ago.

Valuation
No change to our target price of RM3.50, based on unchanged CY18 PE multiples of 20x for the construction division, 18.4x for the plantation division (20% holding discount to IJMPLNT target PE multiple of 23x), 16x for the infrastructure divisions, 12x for the property division and 14x
for the building material division.

Maintain our SELL on IJM as we think the share price is trading close to its fair value.

Share Cap (m) 3627.8
Market Cap @ RM (RMm) 12189.3
52-wk Hi/Lo (RM) 3.61/3.07
12-mth Avg Daily Vol (000' shrs) 4596
Estimated Free Float (%) 60.6
Beta 1.07
Major Shareholders (%)
Employees Provident Fund - 14.91
Lembaga Tabung Haji - 5.83
Skim Amanah Saham Bumiputera - 5.57
Kumpulan Wang Persaraan - 5.06

Source: TA Securities

[winston]

not vested

IJM Corporation

We value IJM based on SOTP.

We value the construction segment based on a 16x FY19E P/E, in line with the industry average multiple, but also taking into account the growing order book.

Meanwhile, we value the industry segment based on a 15x P/E, given the strengthening demand for building materials due to the increased infrastructure investment.

We value the property development business using a DCF of its land bank, using a WACC of 6.8%, a 15% development margin and the infrastructure space using a WACC of 6.8%.

IJM plantation and Scomi are valued based on market value.

A 10% Holdco discount is assumed to arrive at our one-year forward TP.

Key risks for IJM include:
1) Execution risk on its construction order book. We assume an average annual replenishment of c. S$3bn. An inability to secure or replenish its order book would be a downside risk.
2) A downturn in the property sector would have a significant impact on valuations, which accounts for 22% of our RNAV estimates.
3) A slower-than-expected ramp-up and expansion of Kuantan port; we forecast the port to reach capacity by 2020, and for the second phase to be completed by 2024. Delays in completion or ramp-up would affect valuations.

Source: DB

[winston]

not vested

Nov 29, 2017

Results Review

IJM’s 1HFY18 net profit of RM237.3mn came in below expectations, accounting for 32.3% and 36.4% of our and street’s full-year estimates.

The deviation was mainly due to lower-than-expected contribution from construction and infrastructure divisions, and weaker-than-expected margins for property, plantation and manufacturing divisions.

YoY, 1HFY18 net profit was 15.1% lower at RM237.3mn, despite the revenue grew 9.4% to RM3062.1mn. The drop in earnings was dragged by weaker results in the manufacturing & quarrying division, plantation division and investment. Nevertheless, the construction and property divisions saw earnings improvement, backed by higher revenue.

IJM carries a strong outstanding construction order book of RM9.4bn, after including RM1,259mn of construction job from the newly-secured SolapurBijapur India Highway. It has secured about RM2.8bn of new jobs YTD, versus our FY18 order book replenishment assumption of RM3.0bn.

Valuation

Following the weaker-than-expected results, we slash the target price from RM3.50 to RM2.89, based on :-
1. CY18 PE multiples of 20x for the construction division
2. 18.4x for the plantation division (20% holding discount to IJMPLNT target PE multiple of 23x)
3. 16x for the infrastructure divisions
4. 12x for the property division and
5. 14x for the building material division.

Downgrade the stock from Buy to Sell as we think the stock has been fairly valued.

Source: TA Securities

[winston]

not vested

Nov 29, 2017

Results

IJM reported a headline bottom line of RM110.6m for its 2QFY18, which dropped 12.3% qoq
and 32.4% yoy.

2QFY18 core net profit of RM122.7m, inched down 4% qoq and slid 18.1% yoy.

The negative variation was mainly bogged down by unfavorable performance in Plantation segment.

Construction order book stands at RM9.4b with target order book of RM3b (achieved 92% to date)
in FY18. Thus far, the group has managed to secure:-
a. 3 buildings works (UOB Tower2 – RM451m, HSBC office building - RM392m and Uptown 8 office tower – RM378m),
b. a tollway (Salapur-Bijapur India highway – RM1.26b) and
c. Kuantan breakwater contract (RM280m).

Valuation & Recommendation

Maintained BUY call with a lower target price of RM3.47 (RM3.75 previously) after our
housekeeping exercise on its SOP valuation.

Our fair value for IJM also implies 18.2x FY2019 PER.

We favour the group for its well-diversified business model, which cushions the downside risk of cyclical nature for its individual segmental business.

Source: JF Apex

[winston]

not vested

Rating: Buy (maintained)
Target price: RM3.76

AMINVESTMENT is “neutral” on the latest development by IJM Corp Bhd buying into 27-storey office on a 1.2-acre site in Tun Razak Exchange (TRX).

The research house said that IJM should focus on securing more building jobs instead of investing in buildings for recurring incomes, as building construction is IJM’s core strength and it generates much higher return on equity and return on asset compared with investing in buildings.

AmInvestment said that the investment by IJM would increase the company’s net debt and gearing of RM3.9bil and 0.42 times as at end-June 2017 to RM4.4bil and 0.47 times respectively, which are manageable.

Recall, IJM is acquiring from KLIFD Sdn Bhd the entire equity stake in Fairview Valley Sdn Bhd (Fairview) for RM1mil.

Fairview is the land owner and developer of a 27-storey office building on a 1.2-acre site in TRX. IJM has previously been appointed the contractor for the building which would cost a total of RM500mil, including the land cost, to complete. Its latest move is “in line with its strategy to grow its recurring income asset portfolio”.

The building comes with a secured tenancy of 84%, with the main tenants being Prudential Assurance Malaysia Bhd and its related companies which have committed themselves to a 15-year lease.

AmInvest said it continues to like IJM Corp as it is a good proxy to the booming local construction sector given its involvement in key infrastructure projects such as the West Coast Expressway, MRT2 and Kuantan Port Deepwater Terminal.

IJM is poised to garner a slice of action in the LRT3, Gemas – Johor Baru double tracking and East Coast Rail Link, based on its forte and track record in rail projects (Seremban-Gemas double tracking, Delhi Metro, MRT1).

IJM’s earnings visibility is good with an outstanding construction order book estimated at RM9.1bil which could keep it busy for the next two to three years. Its diverse business interests spanning a wide range of sectors which also include property, plantation, building materials, toll roads and ports, should help counter sector-specific cyclical downturns, resulting in better earnings stability.

Source: AmInvestment

[winston]

not vested

BUY
Last Traded Price ( 5 Apr 2019): RM2.18 (KLCI : 1,641.81)
Price Target 12-mth: RM2.55 (17% upside) (Prev RM2.28)

What’s New
ECRL revival could benefit three of its divisions

Besides construction and precast flows, ECRL could ignite further investments into Kuantan Port and MCKIP

Successful sale of Scomi or IJM Plantations could be a catalyst

BUY with higher SOP-derived TP of RM2.55

Source: DBS

https://researchwise.dbsvresearch.com/R ... VyaWRAQA==