03-06-2025
IJM continues to target more job wins for FY26
PETALING JAYA: IJM Corp Bhd is aiming for a higher project replenishment target for its financial year 2026 (FY26) despite missing its target again in its FY25 ended March 31, analysts say.
UOB Kay Hian Research (UOBKH Research) said that the construction and property group guided for a higher replenishment range of between RM6bil and 7bil in FY26 after the release of its FY25 results, which beat expectations.
A decent chunk of the replenishments will be from the delayed New Pantai Expressway (NPE) extension worth RM1.4bil and government housing project in Nusantara, Indonesia, estimated at RM1bil.
Other key replenishment opportunities include the Penang LRT, the Penang Airport and road projects in Sabah and Sarawak.
For FY25, IJM reported a core net profit of RM526.9mil, up 55.5% year-on-year following recognition of major construction milestones that saw its construction-segment earnings picking up significantly during 4Q25.
Otherwise, UOBHK Research said that property sales had softened due to delayed launches, while infrastructure earnings declined due to lower throughput for tolls and ports.
The construction segment's order book came in at RM11.1bil, comprising RM6.6bil from local jobs and RM4.5bil from foreign jobs in Singapore and Britain.
Total job replenishments for the division stood at RM2.7bil.
Meanwhile, Hong Leong Investment Bank Research (HLIB Research) said the recent approval for the long-awaited RM1.4bil NPE extension project will lift the group's order book.
'With this win, IJM has hit 40% of our FY26 contract-win assumption and we anticipate more wins this year mainly from data centres and the Nusantara project in Indonesia.
'On the balance-sheet front, IJM's low net gearing of 0.28 times provides ample space to fund the projects,' HLIB Research said.
According to the research house, the NPE extension project will be fully funded by the company with no financial commitment from the government.
The 15km extension will be fully elevated, linking three major highways – IJM's existing NPE and Besraya highways – with the upcoming LIKE Expressway. Construction will begin in the third quarter of this year with completion slated in 2029.
Once operational, the NPE extension is poised to add to IJM's recurring income stream, said HLIB Research.
As for the group's property division, UOBKH Research said total property sales came in at RM1.5bil in FY25 as delayed launches back in 3Q25 resulted in sales coming in at the lower end of IJM's target.
Unbilled sales stood at RM1.54bil and going forward, IJM is targeting RM2bil in sales in FY26 in line with its previous guidance prior to the delays.
As for the group's British ventures, contributions from its newly acquired JRL Group Holdings Ltd could begin as early as FY26.
'The current construction churn rate for the JRL Group is around £400mil with net margins of between 2% and 3%.
'While JRL is currently loss-making, this is largely due to balance-sheet issues causing project delays, which should be solved via a capital injection,' UOBKH Research said.
The research house has a 'buy' rating on the stock with a higher target price of RM3.15 from RM3 before.
