IJM (3336) : Affin Hwang rates IJM as Buy, target price RM7.86
KUALA LUMPUR: Affin Hwang Research has recommended a Buy call on IJM at a target price of RM7.86 based on 16 times CY15 EPS of 49.1 sen.
In a note on Tuesday, the research house said the WCE and Kuantan Port expansion projects will significantly expand the construction order book of IJM.
"There are other concession assets which can be monetized, if management decides so. When the privatization of IJM land is completed in 1Q15, IJM will be the only vehicle for exposure to the group’s substantial property development business," it noted.
Affin Hwang said IJM announced that its indirect unit, IJM Rajasthan(Mauritius) had entered into a conditional Share Purchase and Debenture Subscription Agreement to sell 100% of its Jaipur-Mahua Tollway (JMPTL) to ISQ Asia Infrastructure for INR5.25bil or RM295mil.
The disposal will be initially for 74% and the balance of 26% will be disposed upon obtaining approval from the National Highway Authority of India.
"The proposed disposal of the Jaipur-Mahua tollway concession will result in a RM188mil gain and reduce group gearing.
"We understand JMPTL is EBITDA positive but still not profitable at the pretax level. The proposed disposal of JMPTL will however result in an estimated disposal gain of RM188mil as well as reduced group gearing. No change in our FY15-17 forecasts for IJM as we have not built in any contribution from its Indian tollways," it noted.
http://www.thestar.com.my
KUALA LUMPUR: Affin Hwang Research has recommended a Buy call on IJM at a target price of RM7.86 based on 16 times CY15 EPS of 49.1 sen.
In a note on Tuesday, the research house said the WCE and Kuantan Port expansion projects will significantly expand the construction order book of IJM.
"There are other concession assets which can be monetized, if management decides so. When the privatization of IJM land is completed in 1Q15, IJM will be the only vehicle for exposure to the group’s substantial property development business," it noted.
Affin Hwang said IJM announced that its indirect unit, IJM Rajasthan(Mauritius) had entered into a conditional Share Purchase and Debenture Subscription Agreement to sell 100% of its Jaipur-Mahua Tollway (JMPTL) to ISQ Asia Infrastructure for INR5.25bil or RM295mil.
The disposal will be initially for 74% and the balance of 26% will be disposed upon obtaining approval from the National Highway Authority of India.
"The proposed disposal of the Jaipur-Mahua tollway concession will result in a RM188mil gain and reduce group gearing.
"We understand JMPTL is EBITDA positive but still not profitable at the pretax level. The proposed disposal of JMPTL will however result in an estimated disposal gain of RM188mil as well as reduced group gearing. No change in our FY15-17 forecasts for IJM as we have not built in any contribution from its Indian tollways," it noted.
http://www.thestar.com.my
