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IJM Corporation Berhad
Clinches New DC Job Worth RM1.4bn
Tel: +603-2167 9601
raymondng@ta.com.my
Secures RM1.4bn Data Centre (DC) Contract
IJM has clinched a sizeable data centre (DC) project worth RM1.4bn in Mukim Pulai, Johor. The contract involves the construction of a six-storey DC building, incorporating office facilities as well as a refuse and recycling centre. The development, with an estimated gross floor area of 62,000 sq m, will utilise a pre-cast system of columns, beams and hollow-core slabs, complemented by steel structures to support M&E plant installations.
The project is scheduled for completion by Sept-2026, with a targeted delivery timeline of 13 months.
Our View
This win marks IJM’s first new job win in FY26 and its fourth DC project in Johor, further strengthening its unbilled orderbook to RM9.2bn, equivalent to 3.6x FY25 construction revenue.
Based on an assumed net margin of c.6.5%, the project is expected to generate RM91.0mn in net profit over the construction period.
Forecast
No change to our earnings forecasts.
Valuation
We reiterate our TP of RM3.46, premised on 1.1x CY26 P/B and incorporating a 3% ESG premium in line with our 4-star rating. We continue to like IJM for the following reasons: (i) its position as the front-runners for large-scale infrastructure projects, i.e. Penang LRT and Nusantara civil servant housing project, and (ii) its growing presence in the thriving data centre industry. Maintain Buy on the stock.
| Share Information | |
|---|---|
| Bloomberg Code | IJM MK |
| Stock Code | 3336 |
| Listing | Main Market |
| Share Cap (mn) | 3,505.2 |
| Market Cap (RMmn) | 10235.10 |
| 52-wk Hi/Lo (RM) | 3.39/1.79 |
| 12-mth Avg Daily Vol (‘000 shrs) | 9,366.8 |
| Estimated Free Float (%) | 80.6 |
| Beta | 1.2 |
Major Shareholders (%)
- EPF 17.1
- Amanah Saham Nasional Bhd 12.9
- Kumpulan Wang Persaraan 9.7
| Forecast Revision | FY26 | FY27 |
|---|---|---|
| Forecast Revision (%) | 0.0 | 0.0 |
| Net profit (RMm) | 529.4 | 589.1 |
| Consensus | 546.6 | 607.3 |
| TA’s / Consensus (%) | 96.9 | 97.0 |
| Previous Rating | Buy (Maintained) | |
| Consensus Target Price | 3.29 | |
| Financial Indicators | FY26 | FY27 |
|---|---|---|
| Net Debt / Equity (%) | 13.0 | 12.3 |
| CFPS (sen) | 77.2 | 36.9 |
| P/CFPS (x) | 3.8 | 7.9 |
| ROA (%) | 2.7 | 3.0 |
| NTA/Share (sen) | 3.0 | 3.0 |
| Price/NTA (x) | 1.0 | 1.0 |
| Share Performance (%) | IJM | FBM KLCI |
|---|---|---|
| 1 mth | 9.4 | 3.3 |
| 3 mth | 22.2 | 0.2 |
| 6 mth | 28.0 | (1.0) |
| 12 mth | (7.8) | (2.3) |
(12-Mth) Share Price relative to the FBMKLCI
[Chart data not displayed]
Source: Bloomberg
Table 1: Earnings Summary
Profit & Loss (RM’mn)
| YE March 31 | FY24 | FY25 | FY26F | FY27F | FY28F |
|---|---|---|---|---|---|
| Revenue | 5918.8 | 6252.0 | 6774.9 | 7143.8 | 7517.9 |
| COGS | (4368.6) | (4666.8) | (5013.4) | (5286.4) | (5563.2) |
| Gross profit | 1550.2 | 1585.2 | 1761.5 | 1857.4 | 1954.6 |
| EBITDA | 1573.7 | 1363.1 | 1530.0 | 1694.1 | 1759.4 |
| Dep & Amor | (301.0) | (269.5) | (345.0) | (406.3) | (458.6) |
| EBIT | 1272.8 | 1093.7 | 1185.0 | 1287.8 | 1300.8 |
| Finance cost | (307.1) | (283.2) | (204.2) | (170.4) | (153.4) |
| Associates | (31.2) | (55.1) | (20.0) | (20.0) | (20.0) |
| JV | 29.7 | 35.7 | 28.5 | 22.8 | 18.3 |
| EI | 99.0 | (122.2) | 0.0 | 0.0 | 0.0 |
| PBT | 964.2 | 791.1 | 989.3 | 1120.2 | 1145.6 |
| Adj PBT | 865.2 | 913.2 | 989.3 | 1120.2 | 1145.6 |
| Tax | (299.0) | (323.8) | (375.9) | (425.7) | (435.3) |
| MI | 18.2 | 13.9 | 60.0 | 60.0 | 60.0 |
| Net profit | 600.3 | 403.4 | 513.4 | 594.5 | 610.3 |
| Adj net profit | 501.3 | 525.5 | 513.4 | 594.5 | 610.3 |
Balance Sheet (RM’mn)
| YE March 31 | FY24 | FY25 | FY26F | FY27F | FY28F |
|---|---|---|---|---|---|
| Fixed Assets | 1097.5 | 1232.2 | 1451.1 | 1637.9 | 1797.2 |
| Associates + JV | 1869.3 | 2102.2 | 2110.8 | 2113.6 | 2111.8 |
| Others | 6245.4 | 6047.7 | 5975.2 | 5872.0 | 5742.6 |
| LT Assets | 9212.2 | 9382.1 | 9537.1 | 9623.5 | 9651.6 |
| Inventories | 6297.2 | 6453.6 | 7131.4 | 7519.8 | 7913.6 |
| Trade and other receivables | 1752.3 | 2264.6 | 1992.6 | 2101.1 | 2211.1 |
| ST investments | 657.9 | 576.2 | 576.2 | 576.2 | 576.2 |
| Deposits, cash and bank balances | 2870.4 | 2494.0 | 3472.4 | 3020.8 | 2640.4 |
| Others | 525.3 | 598.9 | 598.9 | 598.9 | 598.9 |
| ST Assets | 12103.1 | 12387.2 | 13771.5 | 13816.8 | 13940.1 |
| Total Assets | 21315.3 | 21769.3 | 23308.6 | 23440.3 | 23591.8 |
| Trade and other payables | 2758.3 | 3130.5 | 5376.9 | 5669.7 | 5966.6 |
| ST Borrowings | 1723.9 | 1874.3 | 1391.9 | 1391.9 | 1391.9 |
| Others | 532.5 | 519.1 | 519.1 | 519.1 | 519.1 |
| ST Liabilities | 5014.8 | 5523.9 | 7287.8 | 7580.7 | 7877.5 |
| LT Borrowings | 3800.4 | 3960.9 | 3475.9 | 2990.9 | 2505.9 |
| Others | 1181.3 | 953.7 | 953.7 | 953.7 | 953.7 |
| LT Liabilities | 4981.7 | 4914.5 | 4429.5 | 3944.5 | 3459.5 |
| Share Cap | 6132.4 | 6132.4 | 6132.4 | 6132.4 | 6132.4 |
| Others | (258.1) | (321.3) | (301.2) | (281.3) | (261.4) |
| Reserves | 4342.2 | 4465.2 | 4645.5 | 4889.4 | 5149.1 |
| Shareholder’s Funds | 10216.5 | 10276.3 | 10476.7 | 10740.5 | 11020.1 |
| MI | 254.6 | 203.5 | 263.5 | 323.5 | 383.5 |
| Perpectual Sukuk | 847.8 | 851.1 | 851.1 | 851.1 | 851.1 |
| Liabilities + Equities | 21315.3 | 21769.3 | 23308.7 | 23440.3 | 23591.8 |
Cash Flow (RM’mn)
| YE March 31 | FY24 | FY25 | FY26F | FY27F | FY28F |
|---|---|---|---|---|---|
| PBT | 964.2 | 791.1 | 989.3 | 1120.2 | 1145.6 |
| Depr & Amort | 301.0 | 269.5 | 345.0 | 406.3 | 458.6 |
| Tax | (299.0) | (323.8) | (375.9) | (425.7) | (435.3) |
| Associate and JV | 1.5 | 19.4 | (8.5) | (2.8) | 1.7 |
| Change in Wkg Cap | (54.7) | 225.0 | 379.7 | 247.5 | 173.6 |
| Other Operating CF | (77.9) | (289.5) | 978.4 | (451.6) | (380.5) |
| CFO | 835.1 | 691.7 | 2308.0 | 893.9 | 963.8 |
| Capex | (450.0) | (500.0) | (500.0) | (500.0) | (500.0) |
| Others | 6.8 | 7.6 | 8.6 | 10.1 | 11.4 |
| CFI | (443.2) | (492.4) | (491.4) | (489.9) | (488.6) |
| Net Addition/Rpmt | (380.0) | (249.6) | (967.4) | (485.0) | (485.0) |
| Dividend Paid | (280.6) | (280.5) | (333.1) | (350.6) | (350.6) |
| Interest | (307.1) | (283.2) | (204.2) | (170.4) | (153.4) |
| Sukuk distribution | (46.7) | (50.0) | (40.0) | (40.0) | (40.0) |
| Others | 337.1 | 152.8 | 706.7 | 190.4 | 173.4 |
| CFF | (677.3) | (710.5) | (838.1) | (855.6) | (855.6) |
| Net Cash Flow | (285.5) | (511.1) | 978.4 | (451.6) | (380.5) |
Ratio
| YE March 31 | FY24 | FY25 | FY26F | FY27F | FY28F |
|---|---|---|---|---|---|
| EBITDA margin (%) | 26.6 | 21.8 | 22.6 | 23.7 | 23.4 |
| Core EPS (sen) | 14.3 | 15.0 | 14.6 | 17.0 | 17.4 |
| EPS Growth (%) | 48.2 | 4.9 | (2.3) | 15.8 | 2.7 |
| PER (x) | 20.4 | 19.5 | 19.9 | 17.2 | 16.8 |
| GDPS (sen) | 8.0 | 8.0 | 9.5 | 10.0 | 10.0 |
| Div Yield (%) | 2.7 | 2.7 | 3.3 | 3.4 | 3.4 |
| Net cash (RMm) | (2654.0) | (3341.2) | (1395.3) | (1361.9) | (1257.4) |
| Net gearing (x) | 0.3 | 0.3 | 0.1 | 0.1 | 0.1 |
| ROE (%) | 5.0 | 5.1 | 4.9 | 5.6 | 5.6 |
| ROA (%) | 2.7 | 2.7 | 2.7 | 3.0 | 3.0 |
| NTA (RM) | 2.9 | 2.9 | 3.0 | 3.0 | 3.1 |
| P/NTA (x) | 1.0 | 1.0 | 1.0 | 1.0 | 0.9 |
Assumptions (RM bn)
| YE Dec 31 | FY24 | FY25 | FY26F | FY27F | FY28F |
|---|---|---|---|---|---|
| New job wins | 3734 | 2600 | 2600 | 2600 | 2600 |
Sector Recommendation Guideline
OVERWEIGHT: The total return of the sector, as per our coverage universe, exceeds 12%.
NEUTRAL: The total return of the sector, as per our coverage universe, is within the range of 7% to 12%.
UNDERWEIGHT: The total return of the sector, as per our coverage universe, is lower than 7%.
Stock Recommendation Guideline
BUY: Total return of the stock exceeds 12%.
HOLD: Total return of the stock is within the range of 7% to 12%.
SELL: Total return of the stock is lower than 7%.
Not Rated: The company is not under coverage. The report is for information only.
Total Return of the stock includes expected share price appreciation, adjustment for ESG rating and gross dividend. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting.
Total Return of the sector is market capitalisation weighted average of total return of the stocks in the sector.
ESG Scoring & Guideline
| Scoring | Environmental ★★★★ | Social ★★★★ | Governance ★★★★ | Average ★★★★ |
|---|---|---|---|---|
| Remark | Environmental management system is in place. Had been cited for environmental issues. | Policies and systems for procurement, human rights, human resources, community investment, supply chain in place. | Having various policies and systems such as diversity and inclusion policy, anti-bribery and anti-corruption policy, whistleblowing policy, board diversity policy. 20% women representation at board but the group endeavours to meet the 30% threshold. | |
| ★★★★★ (≥80%) | Displayed market leading capabilities in integrating ESG factors in all aspects of operations, management and future directions. | +5% premium to target price | ||
| ★★★★ (60-79%) | Above adequate integration of ESG factors into most aspects of operations, management and future directions. | +3% premium to target price | ||
| ★★★ (40-59%) | Adequate integration of ESG factors into operations, management and future directions. | No changes to target price | ||
| ★★ (20-39%) | Have some integration of ESG factors in operations and management but are insufficient. | -3% discount to target price | ||
| ★ (<20%) | Minimal or no integration of ESG factors in operations and management. | -5% discount to target price | ||
Disclaimer
The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein.
As of Monday, August 18, 2025, the analyst, Raymond Ng Ing Yeow, who prepared this report, has interest in the following securities covered in this report: (a) nil
Kaladher Govindan – Head of Research
