• We maintain our forecasts, SOP-based FV of RM3.76 (Exhibit 1) and BUY call, following the award of a RM342.2mil MRT2 station job by MRT Corp.

• This is the first key construction IJM has secured in FY18, boosting its outstanding construction order book to RM8.9bil, which is split rather equally among buildings, roads and non-road infrastructure.

• Our forecasts assume a construction job replenishment target of RM3bil annually in FY18-20F, which is consistent with IJM's job wins of RM3bil in FY17.

• We are positive on the latest development. We continue to like IJM Corp as it is a good proxy to the booming local construction sector given its involvement in key infrastructure projects such as the West Coast Expressway, MRT2 and Kuantan Port Deepwater Terminal. Also, IJM is poised to garner a slice of action in the LRT3, Gemas–Johor Bahru double tracking and East Coast Rail Link, based on its forte and track record in rail projects (Seremban–Gemas double tracking, Delhi Metro, MRT1).

• IJM’s diverse business interests, spanning a wide range of sectors that also include property, plantation, building materials, toll roads and ports, should help counter sector-specific cyclical downturns, resulting in better earnings stability.

Source: AmInvest Research - 16 Jun 2017