IJM Corp, Muhibbah Engineering to benefit from ECRL spur line
KUALA LUMPUR: IJM Corporation Bhd and Muhibbah Engineering (M) Bhd are among the companies expected to benefit from the East Coast Rail Link (ECRL) spur line, which provides direct connectivity to two major ports in Port Klang, CIMB Securities Sdn Bhd said.
In a note today, the brokerage said IJM stands to benefit once the ECRL service is commercially operational. It owns and manages Kuantan Port through its 60 per cent stake in Kuantan Port Consortium (the remaining 40 per cent is held by China's Guangxi Beibu Group).
CIMB Securities, which gave the stock a "buy" recommendation with a target price (TP) of RM3.40, noted that IJM signed a memorandum of understanding with Malaysia Rail Link (MRL) on June 10, 2024, to jointly explore ways to maximise the potential of logistical services within the ECRL corridor.
"By leveraging the ECRL's network, IJM believes that this multimodal service will enhance Kuantan Port's logistical reach as the premier gateway to the East Coast of Peninsular Malaysia," it added.
CIMB Securities said similar gains are expected for Muhibbah Engineering, which owns the rights to develop the Kuantan Maritime Hub (KMB) land bank that is strategically located right next to Kuantan Port.
It has issued a "buy" call on the engineering construction company's shares with a TP of RM1.10.
The stockbroking firm said that the 202.35-hectare KMB, which is estimated to cost RM2.1 billion to develop and targeted for completion in 2034, will have world-class shipbuilding facilities that complement the robust prospects of the ECRL.
On downstream activities, CIMB Securities said Malayan Cement Bhd — which it has given a "buy" recommendation with a TP of RM6.35 — to secure additional orders from the ECRL spur line, as it continues to supply cement to the project on a non-exclusive basis.
It said the unveiling of the ECRL spur line is within its expectations, as it forms part of the original 665-kilometre (km) ECRL alignment.
It noted that, as of April 2025, construction progress on the ECRL had reached 82.5 per cent, about two and a half months ahead of schedule.
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