Stock Name: IJM
Company Name: IJM CORPORATION BHD
Research House: OSK
KUALA LUMPUR: OSK Research has maintained its buy call on IJM Corp at RM4.86 with target price RM5.45 and said the company could achieve pre-tax margins of 6%-8% for the Murum Dam access road projects worth RM246.7 million.
IJM announced that it has received two Letters of Award (LOA) for the Murum Dam access road totaling RM246.7 million. Package A1 (RM125.2m) is for a 20km road while Package B2 (RM121.5m) is for one of 10.5km.
Other associated works are minor bridges, culverts, drains and pavement works. The jobs, for which CONSTRUCTION [] would take two years, were awarded by Sarawak's Ministry of Works.
OSK Research said following the increase in projects tendered for during the 4Q09-1Q10 period, it expects the award momentum to accelerate in FY11 and are assuming the group would secure RM2 billionn in new jobs.
"We see India as a key contributor to IJM's contract flows. There are no changes to our estimates and we maintain our buy call ahead of its construction margin recovery," it said.
Incorporating this new job, IJM's orderbook is estimated at about RM4.45 billion, it said.
"We leave our earnings unchanged as the contract value is still within our FY11 replenishment target of RM2 billion. Our RM5.45 TP is based on the Sum of Parts methodology, which implies 18.3 times FY11 earnings.
"We think the time is ripe to buy into IJM ahead of its construction margin recovery and anticipated strong performance of its property division," it said.
Company Name: IJM CORPORATION BHD
Research House: OSK
KUALA LUMPUR: OSK Research has maintained its buy call on IJM Corp at RM4.86 with target price RM5.45 and said the company could achieve pre-tax margins of 6%-8% for the Murum Dam access road projects worth RM246.7 million.
IJM announced that it has received two Letters of Award (LOA) for the Murum Dam access road totaling RM246.7 million. Package A1 (RM125.2m) is for a 20km road while Package B2 (RM121.5m) is for one of 10.5km.
Other associated works are minor bridges, culverts, drains and pavement works. The jobs, for which CONSTRUCTION [] would take two years, were awarded by Sarawak's Ministry of Works.
OSK Research said following the increase in projects tendered for during the 4Q09-1Q10 period, it expects the award momentum to accelerate in FY11 and are assuming the group would secure RM2 billionn in new jobs.
"We see India as a key contributor to IJM's contract flows. There are no changes to our estimates and we maintain our buy call ahead of its construction margin recovery," it said.
Incorporating this new job, IJM's orderbook is estimated at about RM4.45 billion, it said.
"We leave our earnings unchanged as the contract value is still within our FY11 replenishment target of RM2 billion. Our RM5.45 TP is based on the Sum of Parts methodology, which implies 18.3 times FY11 earnings.
"We think the time is ripe to buy into IJM ahead of its construction margin recovery and anticipated strong performance of its property division," it said.
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