Stock Name: IJM
Company Name: IJM CORPORATION BHD
Research House: OSK
KUALA LUMPUR: OSK Research is maintaining its Neutral call on IJM Corp at RM4.70 after it had accepted the Letter of Award for the CONSTRUCTION [] of the Besraya Elevated Expressway for a fixed price lump sum of RM600 million. Construction period is 36 months.
The research house said on Monday, March 22 this award does not come in as a surprise given that IJM had already received a letter from the Ministry of Works in February stating of the intention to extend the Sg Besi Highway. The contract value of RM600 million was however slightly lower than the previous guidance of RM649 million (-7.6%).
Besraya Elevated Expressway is an extension of the Sungai Besi Highway by 12.3km. The extended portion will be an elevated highway commencing at the previously abolished Salak Jaya toll and will connect to Jalan Istana and the Middle Ring Road 2 (MRR2).
"We have previously factored in the Besraya Elevated Expressway into our FY11-12 earnings projections. We now adjust down our FY11-12 earnings by an insignificant 0.2% to account for the slightly lower than expected project value.
"Our sum of parts (SOP) based TP of RM4.70 is unchanged, implying CY10 PER of 16.8x. In our view, valuations do not appear compelling as large cap contractors are trading at 14.5x CY10 earnings. Maintain NEUTRAL," it said.
Company Name: IJM CORPORATION BHD
Research House: OSK
KUALA LUMPUR: OSK Research is maintaining its Neutral call on IJM Corp at RM4.70 after it had accepted the Letter of Award for the CONSTRUCTION [] of the Besraya Elevated Expressway for a fixed price lump sum of RM600 million. Construction period is 36 months.
The research house said on Monday, March 22 this award does not come in as a surprise given that IJM had already received a letter from the Ministry of Works in February stating of the intention to extend the Sg Besi Highway. The contract value of RM600 million was however slightly lower than the previous guidance of RM649 million (-7.6%).
Besraya Elevated Expressway is an extension of the Sungai Besi Highway by 12.3km. The extended portion will be an elevated highway commencing at the previously abolished Salak Jaya toll and will connect to Jalan Istana and the Middle Ring Road 2 (MRR2).
"We have previously factored in the Besraya Elevated Expressway into our FY11-12 earnings projections. We now adjust down our FY11-12 earnings by an insignificant 0.2% to account for the slightly lower than expected project value.
"Our sum of parts (SOP) based TP of RM4.70 is unchanged, implying CY10 PER of 16.8x. In our view, valuations do not appear compelling as large cap contractors are trading at 14.5x CY10 earnings. Maintain NEUTRAL," it said.
No comments:
Post a Comment