11 August 2025
IJM Corp (IJM MK)
Getting Very Busy In Shah Alam; BUY
- Keep BUY, new MYR3.73 TP (from MYR3.30), 23% upside, c.3% yield. We took a look at the progress of IJM Corp’s two ongoing warehouse-related jobs in Shah Alam and felt upbeat on the progress so far. The presence of Maersk’s 2.1m sq ft storage and office site in Section 26, Shah Alam is a testament to the importance of the area in fulfilling logistics needs, and this should help IJM secure new jobs within the area in the future.
- The industrial building job. The first job in Shah Alam, awarded in Jun 2023, is worth MYR654m, and is for the design, execution, and construction of phase one of the Shah Alam International Logistics Hub (SAILH), commissioned by Global Vision Logistics (GVL). Phase one of SAILH includes a 4-storey warehouse complex, 4-storey multi-level parking facility, and a 1-storey office alongside ancillary buildings (Figure 1).
- The second warehouse-related job in Shah Alam is worth MYR584m, awarded in Jun 2024 by Strategic Sonata for the construction of Plot A of a logistics hub (Plot A hub) in Section 15. This project is situated across GDB Holdings’ (GDB MK, NR) MYR866m job for Plot B of the same logistics hub, also awarded by Strategic Sonata (Figure 4).
- What we saw: Progress has been quite commendable, especially for the Plot A hub. While we did not observe many high structures during our previous visit in March, progress had picked up in July, with many cranes being deployed, turning the area into the ‘Valley of Cranes’ (Figure 7). Based on our estimates, both projects (SAILH and Plot A Hub) are roughly 60-80% done, and should reach completion in 1HCY26.
- Industrial building jobs, excluding data centres (DC), made up 26-28% of IJM’s MYR6.6bn outstanding orderbook as of end-Mar 2025, based on our projections. We envisage that demand for warehousing in Shah Alam will remain robust, as it is within a 30-40 minute drive from Port Klang, making the area close enough to serve import/export needs while avoiding the congestion at the Port Klang area.
- We maintain our earnings estimates but tweak our target P/E upwards to 18.5x (from 15x) for the construction arm in our SOP valuation. This is to reflect the dissipating signs of murky global trade, with the confirmation of trade deals between the US and a host of countries (including Malaysia’s reduced tariff rate of 19%). We also take the opportunity to roll forward our valuation base year to FY27 from FY26. As a result, we derived an SOP TP of MYR3.73, which includes a 2% ESG premium.
- We believe that any sizeable DC job win in the near term will propel the stock to above its current trading level (FY26F P/E: 19.8x), as it is currently the most undervalued among key peers. A key downside risk is the failure to secure contracts in a timely manner.
Malaysia Ground Checks
Construction & Engineering | Construction
Share Performance (%)
| YTD | 1m | 3m | 6m | 12m | |
|---|---|---|---|---|---|
| Absolute | 0.0 | 17.4 | 32.2 | 23.6 | (2.9) |
| Relative | 5.2 | 15.6 | 31.3 | 25.7 | (0.8) |
| 52-wk Price low/high (MYR) | 1.83 – 3.27 | ||||
Source: Bloomberg
Forecasts and Valuation
| Mar-24 | Mar-25 | Mar-26F | Mar-27F | Mar-28F | |
|---|---|---|---|---|---|
| Total turnover (MYRm) | 5,919 | 6,252 | 7,157 | 7,485 | 7,831 |
| Recurring net profit (MYRm) | 501 | 526 | 538 | 583 | 611 |
| Recurring net profit growth (%) | 81.2 | 4.8 | 2.3 | 8.4 | 4.9 |
| Recurring P/E (x) | 21.31 | 20.28 | 19.82 | 18.29 | 17.44 |
| P/B (x) | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 |
| P/CF (x) | 10.68 | 15.31 | 14.07 | 14.65 | 14.04 |
| Dividend Yield (%) | 2.6 | 2.6 | 2.6 | 2.6 | 2.6 |
| EV/EBITDA (x) | 7.40 | 8.49 | 9.57 | 8.95 | 8.10 |
| Return on average equity (%) | 6.0 | 3.9 | 4.8 | 5.3 | 5.7 |
| Net debt to equity (%) | 24.0 | 29.9 | 26.3 | 23.0 | 19.3 |
Source: Company data, RHB
Overall ESG Score: 3.1 (out of 4)
E Score: 3.1 (EXCELLENT)
S Score: 3.0 (GOOD)
G Score: 3.0 (GOOD)
Please refer to the ESG analysis on the next page
Emissions And ESG
Trend analysis
Total emissions were higher by 15% YoY in FY25 but scope 2 emissions recorded a decrease of 4% YoY.
| Emissions (tCO2e) | Mar-23 | Mar-24 | Mar-25 | Mar-26 |
|---|---|---|---|---|
| Scope 1 | 39,681 | 20,820 | 21,445 | na |
| Scope 2 | 54,202 | 51,430 | 49,472 | na |
| Scope 3 | 837,684 | 867,685 | 1,006,340 | na |
| Total emissions | 931,567 | 939,935 | 1,077,256 | na |
Source: Company data, RHB
Latest ESG-Related Developments
IJM commits to achieving net zero carbon emissions by 2050, which covers Scope 1, Scope 2 and operational Scope 3 categories while the reduction of embodied Scope 3 emissions is achieved through supplier engagements.
IJM’s greenhouse gas (GHG) emissions data for its baseline year FY2023 has been independently verified.
ESG Unbundled
Overall ESG Score: 3.1 (out of 4)
Last Updated: 10 August 2025
E Score: 3.1 (EXCELLENT)
In the group’s latest annual report, Scope 1 and 2 emissions were lower by 48% YoY and 5% YoY in FY24 but scope 3 emissions recorded an increase of 0.9% YoY.
S Score: 3.0 (GOOD)
IJM is rated as good in this category. Its training investment of MYR2.5m with over 93,687 hours dedicated to learning and development, represents a significant increase over the previous year.
G Score: 3.0 (GOOD)
70% of IJM’s board members are independent, with disclosures on directors’ remunerations – this includes salaries and bonuses. IJM has an in-house investor relations team and holds regular investor meetings, embodying good transparency and disclosure practices.
ESG Rating History
Source: RHB
Financial Exhibits
Valuation basis
As IJM is a conglomerate, we value the group based on its sum of parts, derived from a combination of P/E, DCF and RNAV valuation methodologies.
Key drivers
IJM’s earnings are underpinned by construction orders, property sales, throughput volume at Kuantan Port, and income from its toll road concessions.
Key risks
Failure to secure contracts in a timely manner.
Company Profile
IJM Corp is a conglomerate with interests in construction, property, plantation, building materials and concessions.
Financial summary (MYR)
| Mar-24 | Mar-25 | Mar-26F | Mar-27F | Mar-28F | |
|---|---|---|---|---|---|
| Recurring EPS | 0.14 | 0.15 | 0.15 | 0.17 | 0.17 |
| DPS | 0.08 | 0.08 | 0.08 | 0.08 | 0.08 |
| BVPS | 2.91 | 2.93 | 3.00 | 3.00 | 3.00 |
| Return on average equity (%) | 6.0 | 3.9 | 4.8 | 5.3 | 5.7 |
Valuation metrics
| Mar-24 | Mar-25 | Mar-26F | Mar-27F | Mar-28F | |
|---|---|---|---|---|---|
| Recurring P/E (x) | 21.31 | 20.28 | 19.82 | 18.29 | 17.44 |
| P/B (x) | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 |
| FCF Yield (%) | 6.7 | 4.9 | 5.5 | 5.2 | 5.5 |
| Dividend Yield (%) | 2.6 | 2.6 | 2.6 | 2.6 | 2.6 |
| EV/EBITDA (x) | 7.40 | 8.49 | 9.57 | 8.95 | 8.10 |
| EV/EBIT (x) | 9.92 | 11.94 | 14.79 | 13.73 | 12.36 |
Income statement (MYRm)
| Mar-24 | Mar-25 | Mar-26F | Mar-27F | Mar-28F | |
|---|---|---|---|---|---|
| Total turnover | 5,919 | 6,252 | 7,157 | 7,485 | 7,831 |
| Gross profit | 1,550 | 1,585 | 1,496 | 1,562 | 1,636 |
| EBITDA | 1,705 | 1,539 | 1,307 | 1,367 | 1,431 |
| Depreciation and amortisation | (432) | (445) | (461) | (477) | (493) |
| Operating profit | 1,273 | 1,094 | 846 | 891 | 938 |
| Net interest | (307) | (283) | (223) | (195) | (190) |
| Pre-tax profit | 964 | 791 | 675 | 761 | 816 |
| Taxation | (299) | (324) | (166) | (180) | (189) |
| Reported net profit | 600 | 403 | 498 | 557 | 604 |
| Recurring net profit | 501 | 526 | 538 | 583 | 611 |
Cash flow (MYRm)
| Mar-24 | Mar-25 | Mar-26F | Mar-27F | Mar-28F | |
|---|---|---|---|---|---|
| Change in working capital | (160) | (315) | 34 | 358 | 11 |
| Cash flow from operations | 1,000 | 696 | 758 | 728 | 759 |
| Capex | (288) | (171) | (172) | (173) | (173) |
| Cash flow from investing activities | (135) | (765) | 80 | 129 | 129 |
| Dividends paid | (281) | (280) | (280) | (280) | (280) |
| Cash flow from financing activities | (835) | (314) | (802) | (773) | (766) |
| Cash at beginning of period | 2,825 | 2,870 | 2,494 | 2,531 | 2,616 |
| Net change in cash | 29 | (384) | 36 | 84 | 122 |
| Ending balance cash | 2,854 | 2,487 | 2,531 | 2,616 | 2,739 |
Balance sheet (MYRm)
| Mar-24 | Mar-25 | Mar-26F | Mar-27F | Mar-28F | |
|---|---|---|---|---|---|
| Total cash and equivalents | 2,870 | 2,494 | 2,531 | 2,616 | 2,741 |
| Tangible fixed assets | 2,237 | 2,157 | 2,071 | 1,980 | 1,883 |
| Total investments | 1,884 | 2,039 | 2,267 | 2,158 | 2,376 |
| Total assets | 21,315 | 21,770 | 21,829 | 21,548 | 21,386 |
| Short-term debt | 1,724 | 1,874 | 1,774 | 1,674 | 1,574 |
| Total long-term debt | 3,863 | 4,005 | 3,805 | 3,605 | 3,405 |
| Total liabilities | 9,996 | 10,439 | 10,229 | 9,948 | 9,786 |
| Total equity | 11,319 | 11,331 | 11,600 | 11,600 | 11,600 |
| Total liabilities & equity | 21,315 | 21,770 | 21,829 | 21,548 | 21,386 |
Key metrics
| Mar-24 | Mar-25 | Mar-26F | Mar-27F | Mar-28F | |
|---|---|---|---|---|---|
| Revenue growth (%) | 29.4 | 5.6 | 14.5 | 4.6 | 4.6 |
| Recurrent EPS growth (%) | 83.1 | 5.1 | 2.3 | 8.4 | 4.9 |
| Gross margin (%) | 26.2 | 25.4 | 20.9 | 20.9 | 20.9 |
| Operating EBITDA margin (%) | 28.8 | 24.6 | 18.3 | 18.3 | 18.3 |
| Net profit margin (%) | 10.1 | 6.5 | 7.0 | 7.4 | 7.7 |
| Dividend payout ratio (%) | 46.7 | 69.5 | 56.4 | 50.4 | 46.4 |
| Capex/sales (%) | 4.9 | 2.7 | 2.4 | 2.3 | 2.2 |
| Interest cover (x) | 4.14 | 3.86 | 3.78 | 4.56 | 4.94 |
Source: Company data, RHB
Figure 1: SAILH’s layout plan
Source: Company, Google Map
Figure 2: Artist’s impression of SAILH
Source: Company, Google Map
Figure 3: Passing by the SAILH site in Shah Alam
Source: RHB
Figure 4: Plot A and Plot B of the logistics hub in Shah Alam awarded by Strategic Sonata to IJM and GDB
Source: Company, Google Map
Figure 5: Artist’s impression of Plot A and Plot B of the logistics hub in Shah Alam
Source: Mapletree
Figure 6: Progress for Plot A of the logistics hub built by IJM back in Mar 2025 – no high structures seen
Source: RHB
Figure 7: Progress for Plot A of the logistics hub built by IJM in Jul 2025 – high structures are visible
Source: RHB
Figure 8: View of Plot B of the logistics hub (being built by GDB) from the highway
Source: RHB
Figure 9: Progress for Plot A of the logistics hub built by IJM in Jul 2025
Source: RHB
Figure 10: SOP valuation
| SOP component | Justification | Stake | Value to IJM (MYRm) | Value per share (MYR) |
|---|---|---|---|---|
| Construction | 18.5x P/E FY27F | 100% | 5,704 | 1.62 |
| Manufacturing/industry | 10x P/E FY27F | 100% | 1,556 | 0.44 |
| Toll concessions | DCF (WACC: 8.5%) | Various | 3,305 | 0.94 |
| Kuantan Port | DCF (WACC: 8.5%) | 60% | 785 | 0.22 |
| Property | 50% discount to RNAV | 100% | 3,142 | 0.89 |
| Investment in WCE Holdings | Market value | 27% | 657 | 0.19 |
| Total SOP | 15,149 | 4.30 | ||
| Holding company’s discount | 15% | (2,272) | (0.64) | |
| Intrinsic value per share | 12,877 | 3.66 | ||
| ESG premium | 2% | 258 | 0.07 | |
| TP | 13,135 | 3.73 |
Source: Company, RHB
Recommendation Chart
Source: RHB, Bloomberg
| Date | Recommendation | Target Price | Price |
|---|---|---|---|
| 2025-05-30 | Buy | 3.30 | 2.50 |
| 2025-05-25 | Buy | 3.14 | 2.41 |
| 2025-04-24 | Buy | 3.14 | 2.13 |
| 2025-03-21 | Buy | 3.45 | 2.04 |
| 2025-02-28 | Buy | 3.97 | 2.10 |
| 2025-01-19 | Buy | 3.97 | 2.60 |
| 2024-11-28 | Buy | 4.39 | 2.91 |
| 2024-11-26 | Buy | 4.39 | 2.89 |
| 2024-08-29 | Buy | 4.39 | 2.86 |
| 2024-08-19 | Buy | 4.34 | 3.20 |
| 2024-08-16 | Buy | 4.34 | 3.20 |
| 2024-07-15 | Buy | 4.34 | 3.54 |
| 2024-06-27 | Buy | 3.60 | 3.07 |
| 2024-06-24 | Buy | 3.60 | 3.00 |
| 2024-05-30 | Buy | 3.15 | 2.77 |
Source: RHB, Bloomberg
RHB Guide to Investment Ratings
Buy: Share price may exceed 10% over the next 12 months
Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain
Neutral: Share price may fall within the range of +/- 10% over the next 12 months
Take Profit: Target price has been attained. Look to accumulate at lower levels
Sell: Share price may fall by more than 10% over the next 12 months
Not Rated: Stock is not within regular research coverage
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