IJM Corporation - Clinches RM350m Second Penang Bridge approach roads
IJM Corporation (RM4.82; Buy; Price Target: RM6.00; IJM MK)
Clinches RM350m Second Penang Bridge approach roads
IJM has accepted the Letter of Acceptance from Jambatan Kedua Sdn Bhd for award of “The Second Penang Bridge - Package 3B: Batu Kawan Expressway” at a contract sum of RM349.98m. The Project involves, among others, the construction of a new dual 2-lane carriageway of approximately 5.7 km with a cloverleaf interchange and four (4) bridges. The construction period is 31 months from the date of site possession of 28 June 2010.
This contract is the construction of approach roads for the second Penang bridge on the mainland which we understand is more lucrative than the portion on the island. We also understand IJM was not the lowest bidder but won based on technical competence and reputation to execute. This represents IJM's third contract win for CY10 and will lift its current orderbook by 10% to RM3.9bn. With this win our FY11 (Y/E March) order win assumption is now RM903m. It has since clinched RM597m. Assuming blended pretax margins of 7%, pretax profit over the construction period amounts to RM25m or EPS of 1.3 sen on a full diluted basis.
We reaffirm our Buy rating and SOP-derived TP of RM6.00.
Published by
HWANGDBS Vickers Research Sdn Bhd (128540 U)
Clinches RM350m Second Penang Bridge approach roads
IJM has accepted the Letter of Acceptance from Jambatan Kedua Sdn Bhd for award of “The Second Penang Bridge - Package 3B: Batu Kawan Expressway” at a contract sum of RM349.98m. The Project involves, among others, the construction of a new dual 2-lane carriageway of approximately 5.7 km with a cloverleaf interchange and four (4) bridges. The construction period is 31 months from the date of site possession of 28 June 2010.
This contract is the construction of approach roads for the second Penang bridge on the mainland which we understand is more lucrative than the portion on the island. We also understand IJM was not the lowest bidder but won based on technical competence and reputation to execute. This represents IJM's third contract win for CY10 and will lift its current orderbook by 10% to RM3.9bn. With this win our FY11 (Y/E March) order win assumption is now RM903m. It has since clinched RM597m. Assuming blended pretax margins of 7%, pretax profit over the construction period amounts to RM25m or EPS of 1.3 sen on a full diluted basis.
We reaffirm our Buy rating and SOP-derived TP of RM6.00.
Published by
HWANGDBS Vickers Research Sdn Bhd (128540 U)
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