IJM shares fall despite securing RM1.23 bln contruction contract in Kedah

KUALA LUMPUR: IJM Corporation Bhd shares fell in early trading today despite its unit securing a RM1.23 billion construction contract in Kedah.

At 10.32 am, the counter lost three sen to RM2.77, with 4.405 million shares transacted.

IJM's wholly-owned subsidiary, IJM Construction Sdn Bhd, has accepted a letter of award from AT&S Austria Technologie & Systemtechnik (Malaysia) Sdn Bhd for a design and build contract worth about RM1.23 billion.

Hong Leong Investment Bank Bhd (HLIB) said it views the contract win as a breakthrough for IJM in the semiconductor buildout space.

"While IJM is no stranger to the E&E sector, this marks its maiden billion-ringgit semiconductor contract as a main contractor. We estimate the project to yield a high single-digit profit before tax margin, with its fast-tracked 14-month construction timeline expected to accelerate earnings recognition in the financial year 2027-2028 (FY2027-28)," it said in a research note.

Meanwhile, RHB Investment Bank noted IJM now has a balance order book of RM10.6 billion, of which around 55 to 60 per cent are from Malaysia.

"From Malaysia's outstanding orderbook, we project around 60 to 70 per cent to come from industrial-related projects, including data centres. For year-to-date FY2027, IJM has secured RM3.0 billion worth of new jobs versus the group's internal FY27 job win target of RM 6 to 8 billion," it said, adding that it is maintaining its 'buy' call for IJM at a target price of RM3.50.