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| Ikhmas Jaya is targeting a Pan Borneo Highway package with high bridge
content given the group’s expertise in bridge construction. |
KUCHING: Ikhmas Jaya Group Bhd (Ikhmas Jaya) is actively bidding for contracts to replenish its orderbook.
AmInvestment Bank Bhd (AmInvestment Bank) in a report yesterday said the group currently has a tender book worth approximately RM3 billion.
Some of the projects that Ikhmas Jaya has bade include the Pan Borneo Highway Sarawak, Klang Valley Mass Rapid Transit Line 2 (KVMRT2) and numerous highway projects such as Damansara-Shah Alam Elevated Expressway (DASH), Duta-Ulu Klang Expressway (DUKE) and Sungai Besi-Ulu Kelang Elevated Expressway (SUKE).
For the Pan Borneo Highway Sarawak, AmInvestment Bank noted that the company has been pre-qualified with a Sarawakian partner for a package that the company has bade for.
It gathered that Ikhmas Jaya is targeting a Pan Borneo Highway package with high bridge content given the group’s expertise in bridge construction.
Moreover, the research firm observed that Ikhmas Jaya has also been pre-qualified with a German partner to bid for rail works for KVMRT2, which will become a new business stream for the group if successful.
Besides that, the research firm noted Ikhmas Jaya is also eyeing packages for the Light Rail Transit Line 3 (LRT3).
In the meantime, AmInvestment Bank estimated that Ikhmas Jaya has an outstanding order book of RM708 million at present.
The research firm also projected the company’s earnings to grow at a compound annual growth rate (CAGR) of 26 per cent over financial year 2016 (FY16) to FY18.
On another note, the research firm noted that Ikhmas Jaya can incorporate prefabricated building system (PBS) content into the company’s tenders as value-added advantage.
Year-to-date (YTD), the research firm said the group has secured RM438 million worth of new jobs as compared to RM206 million for financial year 2015 (FY15) ended Dec 2015.
AmInvestment Bank noted those jobs are expected to keep the group busy until Aug 2019.
Additionally, the research firm said apart from the RM166 million contract for the construction of residential serviced apartments in Kuala Lumpur, the other three contracts contained piling or superstructure works.
The research firm also recalled that Ikhmas Jaya’s latest contract win was a RM32.9 million contract from MRCB Sentral Properties Sdn Bhd to undertake foundation works for the Cyberjaya City Centre’s exhibition centre and hotel.
With the latest contract award, it observed that the amount has already exceeded the company’s last year’s topline by 63 per cent.
It also noted that the group has already achieved 88 per cent of its new order book target of RM500 million for FY16.
Therefore, AmInvestment Bank believed more contract wins might flow through by year-end for Ikhmas Jaya, thus, there could be further earnings upgrade for the company.
As a whole, AmInvestment Bank is positive on Ikhmas Jaya’s prospects due to its diversified expertise in piling, superstructure, bridge construction and PBS works.
The research firm also believed Ikhmas Jaya will continue to be a beneficiary of key infrastructure and property development projects given its specialisation in piling and foundation works, building works, bridge construction, and PBS.
Hence, AmInvestment Bank maintained its bullish outlook for Ikhmas Jaya, recommending a ‘buy’ recommendation on the company’s share price, valuing its share price with a fair value of RM1 per share based on a target price earnings (PE) of 12 times for FY16.
IKHMAS (5268) - Ikhmas Jaya actively seeks orderbook replenishment from Sarawak projects
http://www.theborneopost.com/2016/04/21/ikhmas-jaya-actively-seeks-orderbook-replenishment-from-sarawak-projects/#ixzz46QgHeRoL
