Quick take: IJM shares up after clinching RM530mil construction contract

KUALA LUMPUR: Shares in IJM Corp Bhd advanced 2.7% in early trade after securing a RM530mil construction contract in Tun Razak Exchange (TRX).

The conglomerate added 2.78%, or five sen to RM1.85. It is currently trading at a PE ratio of 15.58 times.

IJM has secured a RM530mil contract for the construction of The Exchange TRX’s residential component in TRX.

IJM said its wholly-owned IJM Construction Sdn Bhd had received the letter of acceptance from LQ Residential 1 Sdn Bhd for the superstructure works of two blocks of serviced apartments known as TRX Residences.

The project comprises two towers of 53 and 57 storeys each with a total of 443 units and 453 units respectively.

IJM is undertaking two construction projects in TRX namely HSBC Malaysia and Affin Bank’s new headquarters which are both scheduled for completion by end-2020.

Menara Prudential, which IJM developed, constructed and owns, was completed in May 2019 and is 81% tenanted.

MIDF Research has upgraded IJM to a “buy” with an unchanged target price of RM1.95.

“We understand that TRX Residences, the first contract bagged by IJM Corp in FY20, is a fourth addition to the group’s portfolio of iconic construction projects in TRX.

“It is an acknowledgement of its extensive expertise in high-rise building construction,” it said.

The research house noted that as of end February FY20, IJM Corp order book stood at RM4.5bil–consist of 32% building projects, 11% infrastructure works and 56% roadworks.

“The new contract award will add another RM530mil, for a total of outstanding order book around RM5bil,” it said.

Source: TheStar