Latest news with #RM6bil
The Star
a day ago
- Business
- The Star
Data centres to lead IJM growth surge in FY26
PETALING JAYA: With several data centre projects in the pipeline, next year could be a turning point for IJM Corp Bhd as it steps up its presence in the high-demand sector, says CIMB Research. The research house raised its new-job win forecasts for IJM for its financial year ending March 31, 2026 (FY26) and FY27 by 22% to 33% or about RM6bil per year as the group focuses on delivering one or two major data centre bids worth RM1bil to RM2bil each. The research house noted that as of March 31 this year, IJM's order book stood at a healthy RM6.6bil, or 2.6 times its FY25 construction revenue. 'Owing to an increasingly visible tender pipeline, we have raised IJM's FY26 to FY27 new order book assumptions to RM6bil a year, but these projections are still at the lower end of IJM's RM6bil to RM8bil new contract win target for FY26, suggesting further upside to our earnings forecast. 'We expect FY26 to be a breakout year for IJM, underpinned by five active data centre bids for global technology companies, with three already at an advanced stage,' the research house said in a report following a recent presentation by IJM. Beyond data centre tenders, IJM is actively bidding for government-related projects such as the Penang Light Rail Transit project, and hospital and road projects in Sarawak. It also witnessed an uptick in private tenders for industrial facilities. For FY26, IJM expects its 60%-owned subsidiary Kuantan Port to handle 23 million to 25 million tonnes of cargo, supported by the shipping of commodities such as bauxite, palm oil, liquid chemicals and iron ore. Going forward, CIMB Research foresees three game-changing catalysts reshaping Kuantan Port's long-term potential. One is the commencement of operational services on the East Coast Rail Link in January 2027. The second is Petroliam Nasional Bhd's proposed Southern Carbon Capture and Storage Hub in Kuantan, while the third will come from the second phase of Alliance Steel (M) Sdn Bhd's expansion plans. 'Of these three catalysts, we believe that Alliance Steel's expansion plans will directly lift Kuantan Port's growth trajectory, if the planned product lineup is approved. 'This could potentially double Alliance Steel's throughput volumes to between 14 million and 18 million tonnes from between seven million and nine million tonnes or 36% to 46% of Kuantan Port's existing capacity, providing greater impetus for the port to kick off its own expansion plans' said CIMB Research. Outside Malaysia, the group is a leading contender for a public housing project in Nusantara, Indonesia, worth over RM1bil. Over in Britain, IJM has been scouting for new opportunities from integrated road infrastructure, industrial and logistics facilities, and property redevelopment projects on long-term leases. This aligns with the group's broader target of having a 30% contribution from recurring income, said the research house. It noted that throughout FY24 and FY25, IJM has quietly established its name in Britain through a series of transformative collaborations. Through Innova, a joint-venture with Britain's Network Rail, IJM is finalising six over-station development sites with redevelopment potential once planning consent is secured within a 12 to 18 month timeframe. To boost the group's supply chain capabilities in Britain, IJM completed the acquisition of a 50% stake in British contractor JRL Group, which has been appointed as main contractor for 88 Royal Mint Garden, which is the second phase of Royal Mint Gardens development. In addition, IJM is also involved in The Wheat Quarter, which is a mixed-use regeneration project involving the old Shredded Wheat Factory site in Welwyn Garden City in Hertfordshire. 'Backed by a strong balance sheet, we maintain our 'buy' rating on IJM with a target price of RM3.70 up from RM3.40. At FY27 and FY28 price-earnings multiples of 16 times and 15 times, respectively, the stock is trading at or slightly below its historical mean,' the research house said.
The Star
6 days ago
- Business
- The Star
Driving Malaysia's high income trajectory: ESG-linked investments and green financing
Global finance landscape is gearing towards sustainability. From green bonds to ESG-linked loans, investors are aligning with environmental and social goals. Global consulting firm PricewaterhouseCoopers (PwC) reported that institutional investment in ESG-linked assets is expected to soar to US$33.9 trillion by 2026. Malaysia is also advancing towards sustainable financing. Khazanah Nasional issued RM6bil Sukuk Kelestarian to advance Green goals under the 12th Malaysian Plan. CIMB launched a sustainability linked fund by committing RM3bil through to 2030 for Malaysian SMEs whilst Malayan Banking Bhd announced commitment to mobilise RM20.69bil for sustainable finance. As Malaysia deepens its participation in the global value chain, ESG compliance has become more critical. Sustainability becomes essential. Players in both supply and demand chains prefer to invest and trade with establishments that subscribe to protecting the environment, are equitable in the welfare of its workforce, and are transparent and consistent with its governance. While there may be initial investment in setting up the eco-system for an ESG-compliant environment, the long-term benefits outweigh the initial cost. Reduce, reuse and recycle enable better utilisation of resources. Upskilling staff, better work environment including harmonious relationships among workforce upscale productivity. Transparency and consistency in workflows and policies enhance certainty thereby minimising redundancies. Since its transformation from a commodity-based economy to manufacturing based economy in the 90's, Malaysia has graduated from a lower-middle income to an upper middle-income nation as defined by the World Bank. The country however has since been mired in the middle-income trap. Post pandemic restructuring and upgrading efforts have intensified to accelerate income growth. With political stability and growth-enhancing policies in place, the country's long standing high income nation aspiration will likely be achieved before 2030. ESG and green finance is a key enabler in moving up sustainable value chains that make up a high-income economic regime. This is vital to sustain a higher income economy. Financing the future, green bonds and sustainability-linked instruments collectively are a catalyst for Malaysia to graduate to a high income nation and thereafter, sustain the convergence with the developed nations. It is heartening to observe the growing commitment and flow of resources towards ESG. Challenges remain. The general perception of ESG is that it is meant or only relevant for larger corporations. While compliance costs are high, the structural issue of measuring effectiveness of ESG compliance and accessibility of green and sustainability linked funds to small and medium enterprises are some of the challenges. Small and medium enterprises (SMEs) including micro enterprises account for 97% of companies in Malaysia. Collectively they contributed some 39% of gross domestic products in 2023. Alliance Bank's ESG report 2025 shows remarkable increase in ESG awareness and adoption among Malaysian SMEs. ESG awareness among SMEs grew from 14% to 80% from 2023 to 2025 while ESG adoption more than doubled from 28% to 60% during the same period. Recognising the importance of SMEs ESG adoption, the government introduced the ESG framework in 2024 to facilitate and guide SMEs with a road map towards sustainable energy adoption and cost-effective practices. The government through the Malaysia Industrial Development Authority (MIDA) also supports SMEs with matching grants through the Domestics Investment Accelerator Fund for ESG adoption. Success in the evolving ESG landscape requires inclusiveness. Mobilising and harnessing both larger firms and SMEs, converting ESG awareness to ESG adoption, making accessibility and availability of sustainability-linked funds cost effective to both is critical. Another avenue to cascade ESG and green financing is public-private partnerships that leverage on complementarities and alignment of private and public goals, culminating in successful fundraising and sustainability outcomes. Ng Boon Chan. An entrepreneur committed to life-long learning, he recently graduated with a Master in Public Policy at Sunway University and will embark on an academic pursuit of a PhD in Sustainable Development.
The Star
07-07-2025
- Business
- The Star
Capturing land windfalls for the people in Penang
Closed: Aerial view of the Penang Turf Club. — Filepic/The Star AS Penang faces unprecedented transformations in land use and real estate, the proposed sale of the Penang Turf Club (PTC) land underscores a deeper issue: how should extraordinary land value gains – especially from land originally granted for public or recreational use – be recaptured for public benefit? According to a report in The Star on June 10, 146 ordinary members of the PTC voted in favour of selling the club's 81ha site in George Town, paving the way for a transaction that could yield up to RM6bil once the land is rezoned for commercial use ('Penang Turf Club members vote for land sale during EGM'; online at
The Star
24-06-2025
- Business
- The Star
Third fixed link still on hold but work on LRT bridge to start
GEORGE TOWN: While work on one new crossing between Penang's island and mainland is about to start, discussions for yet another crossing has been going on for years. In fact, the idea of a third fixed link between Penang Island and the mainland was first proposed in the early 2010s as part of the Penang Transport Master Plan. It was originally conceived as an undersea tunnel between Gurney Drive and Bagan Ajam, a 7km tunnel to run 11m beneath the seabed, costing over RM6bil. It was to be funded partly through a land swap involving reclaimed parcels along the Gurney Drive coastline. The project was awarded to Consortium Zenith Construction Sdn Bhd, a special purpose vehicle appointed to undertake the tunnel's feasibility studies and construction. However, the plan never received approval due to cost concerns, political transitions and questions about its financing model. In 2023, the state government signalled a shift, favouring a conventional bridge instead. However, that has run into concerns by Penang Port Sdn Bhd, which indicated that the third bridge would at least need to have 100m of vertical clearance to allow large cruise and cargo vessels through. The main span, without piers or pillars, would need to stretch as far as 2km to prevent interference with shipping lanes. While that plans remains on the drawing board, another more recent idea is bearing fruit – the light rail transit (LRT) bridge under the Federal Government-funded Mutiara Line. The LRT system will link Komtar with the upcoming Silicon Island off the island's southern coast and is expected to serve key locations including SPICE Arena, the airport and the Bayan Lepas industrial zones. The LRT bridge includes a crossing to Butterworth to connect an LRT station in Macallum Street Ghaut with Penang Sentral. It is learnt that the LRT bridge will be 4km long and may include pedestrian and cycling paths as part of a broader multi-modal design. PPSB has specified a vertical clearance of 60m to 62m, with a required mid-channel span of at least 600m to allow ship navigation. On the mainland, the bridge is expected to reach land near the Crowne Plaza Hotel along Jalan Bagan Luar, about 1km north of Penang Sentral. Early-stage construction work on several LRT station sites on the island has begun.
The Star
09-06-2025
- Business
- The Star
Sarawak funding powers Quality Concrete's showing
KUCHING: The Sarawak government's big funding for water infrastructure projects has greatly benefitted concrete product manufacturer Quality Concrete Holdings Bhd , particularly in the rising demand for the company's high-density polyethylene (HDPE) pipes. In the 12-month period to Jan 31, 2025 (FY25), Quality Concrete's sales of own manufactured HDPE and M-PVC pipes surged by an impressive 126.8% to RM19.6mil from RM8.65mil a year ago. 'This growth was fuelled by increasing demand stemming from Sarawak's comprehensive water infrastructure enhancement plans, which include a RM1.1bil pipe replacement initiative and RM6bil rural treated water supply programme spanning the next five years,' said group executive chairman Tiang Ching Kok. He said the HDPE pipes were widely utilised for water reticulation and as protective channels for underground utilities, such as telecommunication and electrical cabling. In addition, Quality Concrete also manufactures multi-layer unplasticised polyvinyl chloride (UPVC) pipes, engineered with high-impact resistance to meet the demanding requirements of sewerage networks and water supply systems. These products, essential components in municipal infrastructure, play a pivotal role in water distribution, flood mitigation and utility service provision in both urban and rural developments. Tiang said the company's construction arm has expanded its presence in the water infrastructure sector by submitting proposals and forming strategic partnerships with leading technology providers to design, build and operate water treatment plants, particularly in underserved areas in Sarawak. 'These efforts signal our readiness to tap into high-impact, government-driven opportunities aligned with national priorities,' he said in the company's annual report. He said Quality Concrete continues to explore new business models and strategic collaborations within the water infrastructure sector. Through ongoing engagements with established technology providers, the company aims to diversify its revenue base by expanding into municipal and rural water treatment solutions. This includes the deployment of modular systems, containerised units and hybrid treatment models tailored to underserved communities. Tiang said in 1Q26, the company's construction division secured three new contracts worth RM295mil, with three other major projects ongoing. 'The division is well positioned to capitalise on national infrastructure priorities, including the Sarawak-Sabah Link Road, Jendela broadband expansion and various flood mitigation and water infrastructure upgrades. 'Furthermore, potential involvement in strategic infrastructure projects, such as Kuching's proposed deepsea port and new airport, present opportunities for long-term order book growth,' he added. As a core pillar of the company's operations, the manufacturing segment has ready-mixed concrete (RMC) plants located in Kuching, Sibu, Mukah and Batang Igan. The RMC plants produce custom-grade ready-mixed concrete tailored to meet diverse project specifications, as well as precast concrete piles integral to foundation works to cater for both government-driven infrastructure development and the private sector projects such as residential building projects. As part of its strategic expansion,the group has recently ventured into the production of hot mix asphalt to support ongoing and future road construction projects. 'This new capability includes the manufacturing of high-quality hot mix asphalt for public roads and infrastructure, enabling seamless collaboration with the company's road maintenance division for a more integrated and efficient project delivery. 'The move also strengthens vertical integration within the company, enhancing operational synergy and providing greater control over key inputs for its road development and rehabilitation contracts,' said Tiang, pointing out that asphalt prices have gone up by about 15% since 2020. In 2020, Quality Concrete was awarded a 10-year concession to maintain state roads in Sri Aman and Betong divisions in southern Sarawak. 'Government plans to expand concession scopes could lead to recurring income while the group's solid performance and operational track record position it well for the 2028 concession renewal, and future bids for federal road maintenance projects, including sections of the Pan Borneo Highway,' Tiang said. In addition to its core business of manufacturing (also involving production of sawn timber and engineered wood products) and construction, Quality Concrete also has a property development arm with a landbank of 81ha located in Kuching and Johor Baru. Tiang said once property market conditions stabilise, the company plans to unlock value of the landbank by undertaking mid-income housing and mixed-use township projects, particularly in the fringe area's Kuching city's fringe areas. Going forward, Tiang said a key strategic priority for Quality Concrete is to intensify efforts to secure higher-margin infrastructure and concession-based projects, particularly in sectors such as road maintenance, water treatment infrastructure and essential public works that promise long-term income stability and robust returns. 'The company is also actively evaluating opportunities under public-private partnership frameworks, with a growing emphasis on playing an integrated role in the project value chain through potential adoption of design, build, operate and transfer or design, build and operate models, where appropriate,' he added.
