- We maintain our BUY call on IJM Corp with our fair value unchanged at RM8.00/share – a 10% discount to its estimated sum-of-parts (SOP) value.

- Despite the challenging market conditions, IJM’s core fundamentals remain intact. IJM’s orderbook momentum is still on an upturn moving into 2015.

- Just last Friday, the group secured the Puteri Cove Residences building award in Johor from Pearl Discovery Development Sdn Bhd. The contract is worth RM538mil, and will be delivered within 33 months.

- Its scope of works comprise:- (i) three blocks of 32-storey serviced apartments; (ii) one block of 5-storey SOHO (56 units); (iii) serviced apartment facilities; (iv) two multi-storey cark park podiums; and (v) a two-storey retail centre.

- This new job is one of three building works worth a combined RM1.3bil that IJM snared in quick succession within three months. The other two contracts are in Ara Damansara (Potpourri: RM356mil) and Bukit Jelutong (Radia: RM435mil) that were secured in November and December 2014, respectively.

- This brings IJM’s new wins to an impressive total of RM4.5bil for the FY to-date (ending March 2015), which is c.22% higher than our estimate of RM3.7bil.

- We are however, leaving our new contract assumptions and earnings unchanged for now pending more clarity on the latest award of jobs for the West Coast Expressway (WCE).

- Just last month, the IJM-Kumpulan Europlus (IJM-K Euro) JV was appointed by WCE’s concessionaire, West Coast Expressway Sdn Bhd, as the Engineering, Procurement and Construction (EPC) contractor for the highway.

- At the same time, the IJM-K Euro JV was also awarded packages 3, 4, 5 and 8 of WCE worth not more than RM2.8bil. More could come IJM’s way with another ~RM2.2bil worth of WCE jobs up for grabs under an open tender.

- A clearer picture should emerge within the next one to two quarters. By the same token, IJM should be at the forefront of the Phase 1 of the Kuantan Port Expansion.

- Our preliminary checks indicate that operating conditions at the existing Kuantan Port are largely intact despite the devastating floods that have hit Peninsular Malaysia recently.

- Likewise, IJM aims to complete the proposed privatisation of its property arm, IJM Land by March/April this year. The stock is currently trading at a 26% discount to its NAV.

Source: AmeSecurities