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Monday, January 13, 2014

IJM is HwangDBS' top pick for construction sector Read more: IJM is HwangDBS' top pick for construction sector http://www.btimes.com.my/Current_News/BTIMES/articles/huang/Article/#ixzz2qEYLs3m1

Source: http://www.btimes.com.my/Current_News/BTIMES/articles/huang/Article/

KUALA LUMPUR: HwangDBS Vickers Research has named IJM Corporation Bhd as its top pick for the construction sector this year on the expectation that the company clinches the West Coast Expressway (WCE) project.

The research house in a note last Friday said IJM is optimistic of clinching RM3 billion of works from the project, which will more than double the company's order book to RM5.5 billion, making it the most attractive among large cap stocks.

It said the West Coast Expressway is ex-pected to benefit four of IJM's divisions - construction, property, manufacturing and concession - as the company has a 38.2 per cent effective stake in West Coast Expressway Sdn Bhd (WCE SB), the owner of the West Coast Expressway project.

IJM's stake includes a 20 per cent di-rect stake in WCE SB and a 22.7 per cent inte-rest in Kumpulan Europlus Bhd, which owns the remaining 80 per cent stake in WCE SB.

Meanwhile, HwangDBS Vickers has picked mass rapid transit (MRT) project proxies Gamuda Bhd and MMC Corp Bhd, with the government being extremely committed to ensure the rollout of the entire MRT project.

"We expect the MMC-Gamuda joint venture to return as tunnelling contractor for the MRT Line 2," it said.

On small capital companies, the research house expects Muhibbah Engineering (M) Bhd to transform into a strong oil and gas proxy backed by its complete, integrated business model that covers cons-truction, ship building and crane manufacturing.

"It is also the only construction com-pany under our coverage with the much sought after Petronas licence," it added.

HwangDBS Vickers has placed a "buy" call on IJM, Gamuda, MMC and Muhib-bah with target prices of RM7.20, RM5.40, RM4.95 and RM3.10 respectively. Bernama

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