Investment Highlights

• We maintain our forecasts, SOP-based FV of RM3.76 (Exhibit 1) and BUY call, following the award of a RM378.2mil contract by Damansara Uptown Retail Centre Sdn Bhd to IJM for the design and construction of the 31- storey Uptown 8 office tower in Petaling Jaya.

• This is the fourth key construction job IJM has secured in FY18, boosting its YTD (FY March 2018) job wins to RM1.6bil and its outstanding construction order book to RM9.5bil.

• We are keeping our forecasts that 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 which 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 - 14 Nov 2017