KUALA LUMPUR: AmBank Research has a buy call on IJM Corporation Bhd after the company clinched the RM342.2 million MRT2 station job award from MRT Corp.
Ambank Research said that this is the first key construction job IJM has secured in FY18 and it boosts the company's outstanding construction order book to RM8.9 billion, split equally among buildings, roads and non-road infrastructure.
"Our forecasts assume a construction job replenishment target of RM3 billion annually in FY18-20F, which is consistent with IJM's job wins of RM3billion in FY17," the research house wrote in its report today.
The firm explained that IJM Corp is a good proxy to the booming local construction sector given its involvement in key infrastructure projects in the country (e.g. West Coast Expressway, MRT2 and Kuantan Port Deepwater Terminal).
IJM, it added, is poised to garner a slice of action in the LRT3, Gemas-Johor Bahru double tracking and East Coast Rail Link projects because of its track record in rail projects (e.g. Seremban-Gemas double tracking, Delhi Metro, MRT1).
"IJM's diverse business interests, spanning a wide range of sectors that also include property, plantation, building materials, toll roads, and ports, should help counter sector-specific cyclical downturns, resulting in better earnings stability," AmBank Research said in closing.