$IJM / 3336 (IJM CORPORATION BERHAD) -1QFY25

-Revenue grew by 14.6% YoY to RM1.4bn, driven by strong performance in the construction and port segments.

-Construction PBT surged by over 100% YoY due to increased activities and stable margins, with new order wins reaching RM1.9bn YTD and an outstanding order book of RM7bn.

-Kuantan Port also saw a significant PBT increase of 73.5% YoY, benefiting from higher cargo throughput, particularly in bauxite and silica sand.

-Property division saw a YoY PBT increase of 5% but experienced a QoQ decline, reflecting typical slow starts and lower work progress.

-The toll division was weaker YoY, impacted by lower traffic in India and the absence of compensation income in local toll roads.

-The company expects improved performance in the coming quarters, driven by ramped-up construction activities and potential new project wins, with a FY25 order target of RM5bn.

Outlook and Strategy:

-IJM is focused on the timely execution of its RM7bn order book and anticipates further job wins in infrastructure and data center projects.

-The company is reserving capacity for high-margin projects, particularly in data centers, while being selective with lower-margin tenders.

-Positive developments include the cancellation of a stake acquisition in Pestech, removing uncertainty over future earnings.

IJM Corporation Berhad is a solid company with a strong foundation in construction and infrastructure. Its diversified operations provide resilience, and there is significant growth potential, particularly in the construction and port segments. However, challenges in the property and toll segments need to be monitored, as they could weigh on overall performance. For investors, IJM presents a balanced mix of growth opportunities and risks, making it a company worth considering, especially for those with a longer-term investment horizon.