KUALA LUMPUR, Jan 5 — AmInvestment Bank has maintained its “buy” call on Ikhmas Jaya Group Bhd (IJGB) after its unit, Ikhmas Jaya Sdn Bhd, secured a RM166.4 million contract from Star Effort Sdn Bhd for the construction of two serviced apartments.
A report said the 357-unit project located at Jalan Talalla, Kuala Lumpur, is called Opus and had a gross development value of RM370 million, with Bina Puri having an indirect 95% stake in Star Effort.
AmInvestment Bank said the 29-month contract (January 2016 – June 2018) is expected to contribute positively to IJGB’s bottom line.
“IJGB did not disclose the scope of works for the project. But, we believe it comprises both superstructure and substructure works.
“Assuming a net margin of 10%, the contract is estimated to contribute RM5.5 million annually over financial years (FY) 16 to 18,” said AmInvestment in a research note today.
The research house said the contract win already makes up 51% of the IJGB’s order book replenishment of RM330 million for FY16.
With the latest win, it is estimated that IJGB’s outstanding order book will amount to RM280 million.
It said, given the resilient demand for piling jobs as well as the superstructure works in the market, IJGB is expected to secure more contracts in the coming year to replenish its order book.
AmInvestment said the group should also benefit from ongoing and new infrastructure projects under the 11th Malaysia Plan as well as those initiated by the private sector and as such, was maintaining its “buy” call.
As at 11.25 am IJGB had gained two sen to 68.5 sen with 1,43 million shares traded.