• Overview
  IJM Corporation Berhad (IJM) revenue fell by 13.2% YoY but increased by 2.2% QoQ thanks to the full resumption of business activities. This is a form consistent with PBT amid a 6.9% YoY drop and a growth of  31.6% YoY. Despite lower earnings on YoY basis, IJM is optimistic on closing the FY in positive note backed outstanding orderbook of RM4.6bn for its construction segment. However, this shall depend on the affirmation of infrastructure projects to be rolled out by government.

• Key highlights.
  As some of the projects have been completed in the previous FY and new projects secured are at initial stage, this contributed to slower construction activity. However, IJM expects their property division to deliver better performance powered by unbilled sales of RM3.4bn despite rising inflation rate and interest rates. Moreover, their manufacturing and quarrying segment have been ramping up with the delivery of piles, quarry products and ready-mixed concrete. Thanks to higher toll revenue at both locally and overseas which increased by 7.8% YoY and 24.3% QoQ has partly negated lower revenue from Port operation due to lower cargo throughput. Resumption of construction activities in both local and overseas counterpart is expected to support their industry division in line with healthy current orderbook.
• Dividend. Declared a 2 sen dividend, in line with the usual practise of first interim dividend payment.
• Outlook. We remain optimistic on IJM FY23’s business outlook with the proposed acquisition of remaining 40% equity interest in RPSB,  which should recover the half year RM20mn losses from WCE  Holdings.

• Valuation. IJM is currently trading at forward PER of 16.4x which is a is a  discount against the 5-year average of 28.6x. IJM is indicatively undervalued.

Source: BIMB Securities Research - 24 Feb 2023