MIDF maintains ‘buy’ call on IJM Corp, cut TP to RM1.63

MIDF maintains ‘buy’ call on IJM Corp, cut TP to RM1.63

KUALA LUMPUR: MIDF Amanah Investment Bank Bhd has maintained “buy” a call on IJM Corporation Bhd (IJM) but revised its target price (TP) lower to RM1.63 from RM1.95 previously.

This was after IJM secured a contract worth RM864.7 million from IJM Perennial Development Sdn Bhd (IJMPD), a 50:50 joint venture company between the group and Perennial Real Estate Holdings Ltd, to build an 11-storey retail mall and a convention centre in Penang.

“We estimated that the job will likely contribute RM13.0-17.0 million annually to earnings,” said the investment bank in a statement today.

It expected the job to be completed within 46 months (by July 31,2021) for the retail mall and within 48 months (by Sept 30, 2024) for the convention centre.

The total contract sum of the project awarded falls within its job replenishment assumption as the management expected to restart work on the Light City Project on August 20, said MIDF.

The project was previously planned to resume on April 20 but it was stalled due to the movement control order (MCO).

“As such, we expected this will be able to provide the group with an earnings visibility for the next four to five years. Meanwhile, we also do not discount the possibility of further contract awards from the Light City Project,” it added.

At 10.52 am, IJMC shares rose three sen to RM1.48, with 1.47 million shares changing hands.