RHB Investment Bank Bhd (RHB Research), MIDF Amanah Investment Bank Bhd (MIDF Research) and CIMB Investment Bank Bhd (CIMB Securities) have all reiterated their BUY calls on IJM Corporation Bhd following the release of its stronger-than-expected financial year 2025 (FY25) results, driven by a solid recovery in its construction division and a robust outlook for job replenishments.
RHB Research raised its target price to RM3.30 from RM3.14, CIMB Securities revised its valuation to RM3.60 while MIDF Research adjusted slightly lower to RM3.74 from RM3.89. All three houses see sizeable upside from current levels, with CIMB Securities and MIDF Research expecting total potential returns of over 50%, including dividends.
IJM’s FY25 core earnings came in at RM526 million, up 4–5% year-on-year and exceeding consensus and RHB Research’s expectations by 8% and 9% respectively. RHB Research attributed the beat to better-than-anticipated construction margins, while CIMB Securities noted a 3.1x year-on-year jump in construction pre-tax profit to RM113 million, with margins doubling to 4.4%. Although MIDF Research flagged the results as below its projections, the research house is keeping its earnings estimates unchanged due to strong prospects from IJM’s JRL and Nusantara jobs.
Analysts see continued strength in IJM’s construction outlook, particularly from industrial and data centre (DC) projects. RHB Research estimates that DC jobs already make up about 11% of IJM’s local order book and any new win valued near RM1 billion could enhance its peer competitiveness. The group is currently pursuing six tenders in this space and recently secured three sizeable DC contracts in FY25.
Beyond DCs, IJM’s expansion is also buoyed by the extension of the New Pantai Expressway, valued at RM1.4 billion and a pending RM1 billion civil service housing bid in Indonesia’s new capital, Nusantara. CIMB Securities highlighted the Indonesian tender outcome is likely by year-end, pending a “Swiss challenge” process. On the local front, IJM is also eyeing participation in the Penang Light Rail Transit (LRT) and the Penang International Airport expansion.
Total outstanding order book stands at RM11.1 billion, including IJM’s stakes in JRL and Hexacon. Despite falling short of its FY25 replenishment target of RM5 billion, securing only RM2.7 billion in new jobs, the group is aiming higher for FY26, targeting RM6–8 billion in new wins, split between local and international markets.
RHB Research believes IJM’s forward price-earnings ratio of 16x still offers upside and raised earnings forecasts by 1–2% for FY26–27, while introducing FY28 estimates with a MYR4bn job win assumption. CIMB Securities also revised FY26–28 earnings upward by 6–8%, citing higher construction billings and stronger margin assumptions.
Despite softer performances in its toll and port divisions—dragged by impairments and lower bauxite throughput respectively—the property segment remains steady, backed by RM1.5 billion unbilled sales and RM2.4 billion in targeted launches for FY26.
All three analysts highlighted strong institutional backing, with EPF, Amanah Saham Nasional and KWAP among IJM’s top shareholders. With sector tailwinds and a robust tender pipeline, analysts believe IJM is well-positioned to regain its construction leadership.
