This article is from www.star-space.com
Thursday,
IJM remains a top construction pick
By HANIM ADNAN
IJM Corp Bhd remains one of
the top picks in the construction sector with its huge order book estimated at
RM2.2bil.
Analysts expect the
outstanding order book to sustain IJM's construction
earnings till end-2006. In addition, the group is aggressively building up its
non-construction divisions, spearheaded by property and manufacturing.
Despite a challenging year
amidst slow Government spending, IJM still managed to secure more than RM1.5bil
worth of contracts in
Avenue Securities, in its
recent notes, said that after under-performing the KL Composite Index by 19%
for some 12 months, IJM's stock saw improvement in
the past three months. In recommending an “outperform” on IJM with a 12-month
target price of RM5.90, it said it expected the group to bid for more projects
in Malaysia and abroad, namely, in the Middle East and India, its stronghold.
The potential big projects
include a build-operate-transfer highway project in
Avenue Securities said IJM
had also been linked to business tycoon Tan Sri Syed Mokthar Al-Bukhary's Tanjung Bin Power Plant civil works (RM1.2bil),
“However, these projects are
not likely to kick off soon as financing has yet to be finalised,”
said the research unit.
In
In property, IJM is in the
midst of acquiring additional land for future development. The company secured
four major joint-venture property development projects in
These projects, together
with the mixed development project in
A construction analyst said
IJM managed to strengthen its manufacturing division after acquiring Hume
Industries (M) Bhd's 32.6% stake in Industrial
Concrete Products Bhd (ICP) in May.
He said: “ICP's potential overseas is huge, especially in
The analyst noted that ICP
was also awaiting the results of RM300mil worth of jobs tendered for locally
and abroad.
“IJM management has
indicated that the success tender rate for ports and power plants are
relatively high, about 80% in Malaysia, while buildings has lower success rate
due to competition from other cheap piles players,” he added.
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