Looking Upward For IJM As Shah Alam Industrial Project Lifts Off
The research house highlighted two major warehouse-related contracts in Shah Alam that are progressing well. The first, valued at RM654 million, was awarded in June 2023 by Global Vision Logistics for phase one of the Shah Alam International Logistics Hub (SAILH) in Section 26. The scope covers a four-storey warehouse, a multi-level car park, a single-storey office and ancillary facilities.
Adjacent to the site, Maersk's 2.1 million sq ft storage and office complex reinforces the strategic importance of the area for logistics, a factor that RHB Research believes will aid IJM in securing additional contracts in the future.
The second project, worth RM584 million, was awarded in June 2024 by Strategic Sonata for the construction of Plot A of a logistics hub in Section 15. This is located across from GDB Holdings' RM866 million Plot B development, also commissioned by Strategic Sonata.
According to the house, site inspections in July revealed significant progress at the Plot A hub, with cranes dominating the skyline in what was described as a 'Valley of Cranes'. Both the SAILH and Plot A hub are estimated to be 60–80% complete, with handover expected in the first half of 2026.
Industrial building contracts, excluding data centres, accounted for 26–28% of IJM's RM6.6 billion outstanding order book as of March 2025, based on RHB Research's projections. Demand for warehousing in Shah Alam is expected to remain firm, supported by its proximity to Port Klang, about a 30 to 40-minute drive, which allows operators to serve import and export needs while avoiding congestion near the port.
The upward adjustment in IJM's target price also reflects a higher price-to-earnings multiple for its construction arm, now set at 18.5 times compared with 15 times previously, to capture the benefits of easing trade uncertainties and confirmed trade deals between the United States and several nations, including Malaysia, which has secured a reduced tariff rate of 19%.
RHB Research retained its earnings forecasts but warned that a key downside risk lies in the potential delay or failure to secure new contracts. It added that any sizeable data centre win in the near term could lift the stock above current trading levels, given that IJM remains the most undervalued among its key peers on forecast FY2026 earnings.
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