IJM: Major Contract Win Bolsters Order Book, Outlook Stable
| Key Information Summary | |
|---|---|
| Investment Bank | TA SECURITIES |
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation | |
A prominent Malaysian conglomerate has announced a substantial contract win for mechanical and electrical (M&E) fit-out works at a hyperscale data centre. The RM873.9 million award is expected to significantly bolster the company’s outstanding order book, reinforcing its position in the construction sector.
Contract Details and Scope
The newly secured contract, awarded by Pearl Computing Malaysia SB, an affiliate of Google, involves the fit-out of one data centre hall within the Elmina Business Park in Selangor. This project encompasses the supply and installation of comprehensive mechanical, electrical, security, and telecommunication systems. Additionally, the scope includes extensive coordination, commissioning of all relevant systems and services, and the provision of office furniture and equipment. This award builds upon an earlier RM1.26 billion core and shell package for the same data centre development.
Construction for the fit-out works is slated to commence in the third quarter of 2026 and is anticipated to conclude by the first quarter of 2028.
Order Book and Financial Impact
Following this latest win, the company’s estimated outstanding order book is set to increase by 6.1%, reaching approximately RM15.2 billion, which includes its share of associates. Analysts project that this project will contribute approximately 8% to the company’s net profit for the financial years 2027-2028.
Despite the significant contract value, an investment bank has maintained its earnings estimates for the company. This is because the project’s value was reportedly already factored into their RM8.0 billion order book replenishment assumptions for the financial year 2026.
Investment Perspective
An investment bank maintains an “Outperform” recommendation on the conglomerate, with an unchanged SOP-based target price of RM4.00. This stable outlook reflects confidence in the company’s strategic positioning and execution capabilities in securing high-value infrastructure projects.
