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Ikhmas Jaya Earnings Up On Stronger Margin; Maintain ‘Buy’: AmResearch
Malaysia Daily Bulletin | 23 November 2015
By:
  • Ikhmas Jaya Group reported 3Q15 net profit of RM7.4 million, bringing nine-month earnings to RM23 million, up 45 percent year-on-year, which were within the expectations of AmReseach.
  • The better performance was due to stronger margins, attributable to infrastructure jobs that yielded better margins, as well as the finalisation of the railway electrification and double tracking project as pointed out by AmResearch.
  • Separately, the group has also announced it secured a RM161.1 million contract for the substructure works of four towers of the PJ Sentral development, which will start in November 2015 and is due to be completed by July 2017.
  • With the latest win, the firm has secured RM206 million worth of new jobs this year and boosted its outstanding order book to RM380 million, which will keep it busy over the next 20 months. Meanwhile, tender book remained strong at RM3 billion.

Significance: Given the strong tender book and the likelihood that the group will benefit from ongoing infrastructure and property jobs under the 11th Malaysia Plan, AmResearch has maintained its ‘Buy’ call on the stock with a target price of RM0.85. On similar grounds, JF Apex Securities Research has also maintained its ‘Buy’ call on the group, though with a higher target price of RM0.90.


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