3QFY22: In-line
Recovery in motion; maintain BUY
3QFY22 headline net profit was within our expectation with sequential improvement in earnings at all ops under the NRP P3 (from 1 Oct) and P4 (from 18 Oct). We make no change to our earnings forecasts. We
however lower our RNAV-TP by 15sen to MYR2.05 after the payment of a special dividend from the proceeds of its plantation op sale. IJM remains a potential beneficiary of major infrastructure project awards, supported by a strong balance sheet and track record. Maintain BUY.
3Q headline net profit of MYR98m, 9M MYR793m
All ops saw sequentially higher revenue in 3Q, led by Property (2.4x QoQ). Property and Infra returned to the black, with Property margins expanding quite sizeably, making it the no. 1 contributor to 3Q group
earnings (39% of group pre-tax profit); this was followed by Infra (29%), Construction (21%) and Industry (11%). 9M headline profit included a sizeable gain from the sale of its plantation op (MYR632m) and a smaller subsidiary (MYR7m). Excluding this, group net profit was e.MYR150m.
Strong Construction/Industry orderbook & Prop sales
Outstanding construction order book stood at MYR4.2b as of 31 Dec 2021, of which MYR1.3b were wins in 9MFY22. Its internal win target for FY22 was MYR2b. 9MFY22 property sales was a strong MYR2.1b, exceeding FY21’s MYR1.7b and its internal target of MYR1.7b for FY22. Industry ops’ orderbook wins of 1.65m tonnes over 9MFY22 have also exceeded FY21’s 1.34m tonnes. We believe that traffic volume at BESRAYA and NPE have also returned to their pre-pandemic levels.
Lowering RNAV est. post payment of special div
Post the payment of a 15sen special DPS on 30 Dec 2021, we adjust our RNAV/shr estimate to reflect this. IJM’s balance sheet remains strong with a net gearing of 0.28x as of 31 Dec 2021.