Published: Friday November 1, 2013 MYT 9:12:00 AM
Updated: Friday November 1, 2013 MYT 9:13:24 AM
KUALA LUMPUR: Affin Research has maintained its Buy call on IJM Corp with a target price of RM7.42 after its unit bagged a RM238.4mil contract to construct an office tower and car park at Jalan Raja Laut, Kuala Lumpur.
In a note on Friday, Affin said the contract award is positive but is not expected to significantly change its financial years 2014 to 2016 forecasts.
“We have modelled in our earnings forecasts annual construction billings of RM2bil to RM2.2bil, inclusive of new construction jobs of RM300mil to RM500mil.
“More significant enhancement of its construction order book will come from the commencement of the West Coast Expressway and Kuantan Port expansion projects, which incidentally were also highlighted in the Budget 2014 announcement last Friday,” it said.
Affin noted developers in relation to sustained low interest rates and stronger economic growth are still assessing the downside risk of the proposed RPGT hike to 30% next year, while the impact of the proposed GST of 6% will only impact existing projects which stretched over Apr 2015, and of which can be cushioned by pre-GST purchases of affected building materials.