IJM adds most in 2 weeks

IJM adds most in 2 weeks

Published: 2009/05/27

IJM Corp, Malaysia’s second-biggest builder, climbed the most in two weeks in Kuala Lumpur trading after plans for a bonus share issue and a CIMB Investment Bank Bhd report that said it may win two projects this year.The shares added 1.8 per cent to RM5.80 at 11.14 am on the Malaysian stock exchange, after rising as much as 4.4 per cent, the biggest gain since May 12.

IJM, which yesterday announced the plan to distribute two bonus shares for each five held, may win two contracts valued at a combined RM2 billion (US$573 million) by the end of the year, according to Sharizan Rosely, an analyst at CIMB. The bonus plan is “a timely liquidity-enhancing move,” while the announcement on the new projects came as “a nice surprise to us,” Sharizan said in a report today after an analyst briefing. CIMB kept a “trading buy” rating on IJM.

IJM Chief Executive Officer Krishnan Tan couldn’t be immediately reached on his mobile phone for comment.IJM’s bonus announcement came after the Selangor, Malaysia- based company said profit fell 54 per cent to RM53.3 millionin the three months ended March 31. IJM’s fiscal fourth- quarter profit matched expectations, according to CIMB, Credit Suisse Group AG and Deutsche Bank AG.

Order Book
IJM would surpass its order-book target of RM2.4 billion this year should the company win the projects, Danny Goh, an analyst at Credit Suisse, wrote in a report today.Goh kept an “outperform” call on IJM shares, his top pick in the Malaysian construction industry. Goh upgraded his net income forecast for the company by 14 per cent for fiscal year 2011, and raised the stock’s target price to RM7.00 from RM5.08.“IJM’s large construction capacities and solid track record put it in a favorable position to enhance its order book,” Aun-Ling Chia, an analyst at Deutsche Bank, wrote in a report today, maintaining an “outperform” rating on the stock. Every additional RM1 billion contract would boost IJM’s net income by between 3.6 per cent and 5.5 per cent next fiscal year, Chia said. - Bloomberg