Tuesday, November 29, 2011

HDBSVR maintains high conviction Buy on IJM Corp, TP RM8.70

KUALA LUMPUR (Nov 29): Hwang DBS Vickers Research (HDBSVR) said IJM Corp's first half financial results for the period ended Sept 30, 2011 (1HFY12) were in line and it is expecting a stronger 2H.

The research house said IJM Corp remains its high conviction BUY with a target price of RM8.70.

HDBSVR said IJM reported strong operations, but it was hit by forex loss. The 2QFY12 headline net profit was RM75 million (-35% YoY and QoQ), taking 1HFY12 profit to RM190 million.

'This is within our and consensus' forecasts, excluding the RM32 million forex loss on a USD loan for its Infrastructure unit,' it said.

The research house said the key earnings drivers in 2QFY12 were PLANTATION []s and property which contributed a combined 71% of group pretax profit, while manufacturing profit grew 22% QoQ to RM39 million backed by 6-7 months of orders.

IJM's 1HFY12 property sales were RM630 million, but should meet FY11 peak sales of RM1.47 billion given stronger recognition of unbilled sales of RM1 billion in the 2H.

HDBSVR said CONSTRUCTION [] remained a small earnings contributor at 6%, as key local jobs from its RM3.8 billion orderbook have not started to filter through.

'We expect earnings to accelerate in 2HFY12 as works progress,' it said.

No comments:

Post a Comment