Stock Name: IJM
Company Name: IJM CORPORATION BHD
All obstacles to Kumpulan Europlus Bhd (KEuro) and the Government signing the concession agreement for the West Coast Expressway (WCE) have been overcome, say sources. The signing ceremony for the highway is expected to be held within the next two weeks with some adjustments to the original terms for the proposed concession. "There are some changes to the profit-sharing terms between the concessionaire and the Government. Apart from that the key elements are intact," says a source. (The Edge)
Comment: We opine that this latest development in the signing of the concession agreement for the West Coast Expressway would remove any uncertainty on whether the project, which was first mooted by former president and CEO of KEuro Tan Sri Chan Ah Chye back in the mid 90s, will actually take off the ground. This is not only good news for KEuro but also IJM Corp, the wouldbe main contractor for the bulk of the infrastructure works, worth c.RM4bn. Based on our checks with industry sources, the official award of the WCE packages to IJM Corp and KEuro would happen anytime 6 months after the financing arrangements for commercial loans from a consortium of banks for the highway project has been sorted out. Maintain Buy on IJM Corp, with target price at RM7.02, based on sum-of-parts RNAV valuation. (Benjamin Lee)
Company Name: IJM CORPORATION BHD
| Research House: ECMLIBRA | Price Call: BUY | Target Price: 7.02 |
All obstacles to Kumpulan Europlus Bhd (KEuro) and the Government signing the concession agreement for the West Coast Expressway (WCE) have been overcome, say sources. The signing ceremony for the highway is expected to be held within the next two weeks with some adjustments to the original terms for the proposed concession. "There are some changes to the profit-sharing terms between the concessionaire and the Government. Apart from that the key elements are intact," says a source. (The Edge)
Comment: We opine that this latest development in the signing of the concession agreement for the West Coast Expressway would remove any uncertainty on whether the project, which was first mooted by former president and CEO of KEuro Tan Sri Chan Ah Chye back in the mid 90s, will actually take off the ground. This is not only good news for KEuro but also IJM Corp, the wouldbe main contractor for the bulk of the infrastructure works, worth c.RM4bn. Based on our checks with industry sources, the official award of the WCE packages to IJM Corp and KEuro would happen anytime 6 months after the financing arrangements for commercial loans from a consortium of banks for the highway project has been sorted out. Maintain Buy on IJM Corp, with target price at RM7.02, based on sum-of-parts RNAV valuation. (Benjamin Lee)
Source: ECM Newz Bits 16 April 2012
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