Shah Alam warehouse projects expected to propel IJM earnings
RHB Research said it took a look at the progress of IJM's two ongoing warehouse-related jobs in Shah Alam and was upbeat on the progress so far.
'The presence of Maersk's 2.1 million square-foot storage and office site in Section 26, Shah Alam, is a testament to the importance of the area in fulfilling logistics needs and this should help IJM secure new jobs within the area in the future,' the research house said in a report yesterday.
The group's first job in Shah Alam, awarded in June 2023, is worth RM654mil and is for the design, execution and construction of phase one of the Shah Alam International Logistics Hub (SAILH), commissioned by Global Vision Logistics.
Phase one of SAILH includes a four-storey warehouse complex, a four-storey multilevel parking facility and a single-storey office alongside ancillary buildings.
The second warehouse-related job in Shah Alam is worth RM584mil, awarded in June 2024 by Strategic Sonata for the construction of Plot A of a logistics hub (Plot A hub) in Section 15.
This project is situated across from GDB Holdings' RM866mil job for Plot B of the same logistics hub, also awarded by Strategic Sonata.
RHB Research said progress has been quite commendable, especially for the Plot A hub.
While the research house said it did not observe many 'high structures during our previous visit in March', progress had picked up in July, with many cranes being deployed, turning the area into the 'Valley of Cranes'.
'Based on our estimates, both projects – SAILH and Plot A Hub – are roughly 60% to 80% done, respectively, and should reach completion in the first half of 2026,' the research house said.
RHB Research believes that any sizeable data centre job win in the near term would propel IJM above its current trading level (financial year 2026 forecast price-to-earnings ratio of 19.8 times), as it is currently the most undervalued among key peers.
A key downside risk, however, is the failure to secure contracts in a timely manner.
RHB Research has a 'buy' call on IJM Corp with a target price of RM3.73.
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