IJM Corporation : 9MFY17 results in line, bags RM1.16bil BBCC job BUY

STOCK FOCUS OF THE DAY

IJM Corporation : 9MFY17 results in line, bags RM1.16bil BBCC job            BUY

We upgrade our FY17-19F forecasts by 1-2%, raise our SOP-based FV by 1.4% to RM3.75 (from RM3.70) and maintain our BUY call. We value IJM Corp’s construction business at 16x FY18F earnings, in line with our benchmark forward PE of 14-16x for large-cap construction stocks, and apply a 10% discount to the RNAV of its property business. This follows the latest contract secured, i.e. design & build for the retail mall of Bukit Bintang City Centre worth RM1.16bil, which has boosted its YTD (FY) new jobs secured to RM2.7bil (vs. our assumption for job wins of RM2bil in FY17F), and its outstanding construction order book to RM8.8bil based on our estimates. IJM’s 9MFY17 core net profit of RM400.2mil met our expectations at 74% of our full-year forecast, but missed the market expectations at only 67% of the full-year consensus estimates. We still like IJM Corp as it is a good proxy to the booming local construction sector given its involvement in key infrastructure projects such as West Coast Expressway, MRT2 and Kuantan Port Deepwater Terminal. Also, IJM is poised to garner a slice of action in the LRT3, Gemas-Johor Bahru double tracking and East Coast Rail Link.

Others :

AirAsia : Tailwind in abundance                                                                                  BUY

IJM Plantations : Benefitted from surge in PKO price                                       BUY

Kossan Rubber : Back on track after upgrading works                                      BUY

Media Prima : Gestation period is painful indeed                                              BUY

OldTown : Analyst briefing reaffirms exciting prospects ahead                    BUY

YTL Hospitality Reit: In line with our expectation                                                BUY

Axiata Group: First celco to cut dividend post-spectrum fee                         HOLD

Eastern & Oriental : Challenging outlook remains                                              HOLD

Genting Bhd : RWLV to start in 2HFY17                                                                   HOLD

Genting Malaysia : Boosted by sale of shares in Genting Hong Kong         HOLD

IHH Healthcare : Resilient patient volume growth                                             HOLD

Inari Amertron : Iris scan to be valuation kicker                                                  HOLD

Magnum : Poor ticket sales                                                                                         HOLD

Malayan Banking : Provisions to remain elevated in the near term            HOLD

POS Malaysia : Maiden contribution from Pos Aviation                                   HOLD

TH Plantations : Positive tax expense again                                                          HOLD

WCT Holdings : FY16 core net profit jumps 89%                                                  HOLD

Petronas Gas : Watch out for headwinds to recurring revenues                 SELL

STOCKS ON THE  RADAR

Press Metal,KUB Malaysia,Heveaboard,TMC Life Sciences

ECONOMIC HIGHLIGHTS

Singapore : Inflation to gain momentum

NEWS HIGHLIGHTS

Property Sector : Titijaya’s net profit improves in Q2

Manufacturing Sector : Dancomech net profit at RM12.85mil in FY16

Leisure & Hospitality : Genting FY16 earnings jump to over RM2b