RHB Research has reiterated its “buy” rating on IJM Corp Bhd with a lower target price of RM3.45 after the latter’s management strongly refuted what it called “false and malicious allegations” circulating online about the group and its leadership.
This follows an analysts’ briefing yesterday whereby IJM stressed that it upholds strict corporate governance with its chairman Tan Sri Tan Boon Seng @ Krishnan – a non-executive director – who holds only 0.3% of its shares.
“We expect fundamentals to remain strong, backed by IJM’s diverse exposure to infrastructure, highways, manufacturing facilities and data centres (DCs) with a domestic outstanding orderbook of circa RM6 bil,” penned analyst Adam Mohamed Rahim in a company update.
For the unanimated, the construction and engineering giant has found itself linked to the Malaysian Anti-Corruption Commission (MACC) probe on the RM177 mil cash and gold discovery at the so-called safe house of a former aide of ninth premier Datuk Seri Ismail Sabri Yaakob.
The money is said to be payment made in connection with the MRT3 (Mass Rapid Transit Line 3) project during Ismail Sabri’s tenure.
RHB Research went on to confirm that “at time of writing”, none of IJM’s executives and board members have been contacted by the authorities in relation to the allegations levelled at them.
“IJM said it had lodged a report with the Malaysian Communications and Multimedia Commission (MCMC) to initiate investigations on the allegations and will take legal action if necessary,” revealed the research house.
“The group added that it would cooperate fully with the authorities, if required.”
Moving forward, RHB Research has revised IJM’s target price downward to RM3.45 (from RM3.97 previously) as it only expects the latter to meet RM3 bil in new job win target for FY3/2025F instead of the earlier projected RM5 bil.
“Consequently, we slash our earnings estimates by 5% each for FY2025-2027F. We also ascribe a lower target P/E (price-to-earnings ratio) of 17 times (close to where it was trading during the CY2017 construction upcycle) from 20 times as we think IJM has yet to stack up against other key peers which have sizeable job exposures.”
At 12.07pm, IJM was up 10 sen or 5% to RM2.10with 1-.28 million shares traded, thus valuing the counter at RM7.66 bil. – March 21, 2025
