IJM Corporation Berhad has secured two significant contracts worth RM561 million, further solidifying its presence in the industrial building sector. The first contract, valued at RM508 million, involves a joint venture (JV) with Woh Hup Malaysia Sdn Bhd to construct two data centre buildings in Gelang Patah, Johor. The second contract, worth RM307 million, is for building an electrical and electronics (E&E) manufacturing and warehousing facility in Batu Kawan, Penang. These projects are expected to bolster IJM's reputation in high-tech construction.
Analysts have maintained their BUY call on IJM Corporation, with an unchanged target price (TP) of RM3.89. The recent contract wins highlight IJM's ability to secure and execute large-scale industrial projects, contributing to the company's solid order book of RM7.9 billion. The analysts expect a 21.6% share price return and a 24.1% total return, including dividends.
The data centre project in Johor is particularly noteworthy as it marks IJM's second foray into this sector. The first data centre contract, awarded in June 2024, involved the construction of Block 2 of the Iskandar Puteri Data Centre. The current contract, awarded by an international data centre developer, will see IJM and Woh Hup Malaysia Sdn Bhd, a subsidiary of Singapore-based Woh Hup (Private) Ltd, equally sharing the RM508 million contract value. The two data centre buildings are scheduled for completion in the third quarter of 2025 and the first quarter of 2026, respectively.
In Penang, the RM307 million contract for an E&E manufacturing and warehousing facility will support the growing semiconductor equipment and healthcare device markets. The facility, located at the Bandar Cassia Technology Park, will cover 560,000 square feet and is set to be completed by October 2025. This project is part of IJM's strategy to tap into the robust demand for industrial properties, particularly in the semiconductor sector.
IJM's strong order book, now standing at RM7.9 billion, represents 37.0% of its RM5.0 billion replenishment target for FY25. The company has secured RM1.86 billion worth of jobs year-to-date, with industrial projects making up a significant portion. Analysts believe that IJM is well-positioned to continue expanding its industrial building portfolio, supported by Malaysia's vibrant construction market, driven by investments in new semiconductor facilities and data centres.
IJM is expected to benefit from the upcoming mega rail projects such as the MRT3 and Bayan Lepas LRT, as well as flood mitigation projects. The company is also eyeing work packages in East Malaysia and Indonesia, further diversifying its revenue streams.
