KUALA LUMPUR (Jan 27): CIMB Equities Research advises investors to accumulate IJM Corp shares as it expects the recent newsflow about the West Coast Expressway (WCE) project to spark a rerating of the infrastructure company.
It said on Friday that IJM Corp owns 22.5% of Kumpulan Euro and it is also vying for a share of the WCE CONSTRUCTION [] works.
To recap, on Thursday, Kumpulan Europlus said its subsidiary West Coast Expressway Sdn Bhd had received the government’s approval to build the 316-km west coast project costing RM7.07 billion.
The Banting to Taiping expressway would be on a build-operate-transfer (BOT) with a concession period of 60 years, which could be the longest period for such a concession.
MRT Corporation awarded two significant construction packages worth RM1.738 billion for the Sungai Buloh-Kajang (SBK) My Rapid Transit (MRT) line to IJM Construction Sdn Bhd and Ahmad Zaki Sdn Bhd.
IJM Construction will be appointed the main contractor for Package V5 which will cover the construction and completion of the Viaduct Guideway and other associated works from Maluri Portal to Plaza Phoenix Station worth RM974 million.
Ahmad Zaki will be appointed the main contractor for Package V6 which covers the construction and completion of the Viaduct Guideway and other associated works from Plaza Phoenix to Bandar Tun Hussein Onn Station with a contract value of RM764 million.
CIMB Research said the award of two elevated packages for MRT SBK line and the approval letter for WCE indicate that progress on major projects is gathering pace, as expected. Newsflow on job awards is likely to be active in the medium term.
“These developments tie in with our expectation of strong project flows in 1H12. This news should spark a rerating of our top pick, IJM Corp, which will be a big winner of both projects. The sector remains a Trading Buy, with Gamuda being our other top pick,” it said.
It said on Friday that IJM Corp owns 22.5% of Kumpulan Euro and it is also vying for a share of the WCE CONSTRUCTION [] works.
To recap, on Thursday, Kumpulan Europlus said its subsidiary West Coast Expressway Sdn Bhd had received the government’s approval to build the 316-km west coast project costing RM7.07 billion.
The Banting to Taiping expressway would be on a build-operate-transfer (BOT) with a concession period of 60 years, which could be the longest period for such a concession.
MRT Corporation awarded two significant construction packages worth RM1.738 billion for the Sungai Buloh-Kajang (SBK) My Rapid Transit (MRT) line to IJM Construction Sdn Bhd and Ahmad Zaki Sdn Bhd.
IJM Construction will be appointed the main contractor for Package V5 which will cover the construction and completion of the Viaduct Guideway and other associated works from Maluri Portal to Plaza Phoenix Station worth RM974 million.
Ahmad Zaki will be appointed the main contractor for Package V6 which covers the construction and completion of the Viaduct Guideway and other associated works from Plaza Phoenix to Bandar Tun Hussein Onn Station with a contract value of RM764 million.
CIMB Research said the award of two elevated packages for MRT SBK line and the approval letter for WCE indicate that progress on major projects is gathering pace, as expected. Newsflow on job awards is likely to be active in the medium term.
“These developments tie in with our expectation of strong project flows in 1H12. This news should spark a rerating of our top pick, IJM Corp, which will be a big winner of both projects. The sector remains a Trading Buy, with Gamuda being our other top pick,” it said.
