Latest news with #RM6bil
The Star
a day ago
- 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.
The Star
03-06-2025
- Business
- The Star
IJM continues to target more job wins for FY26
PETALING JAYA: IJM Corp Bhd is aiming for a higher project replenishment target for its financial year 2026 (FY26) despite missing its target again in its FY25 ended March 31, analysts say. UOB Kay Hian Research (UOBKH Research) said that the construction and property group guided for a higher replenishment range of between RM6bil and 7bil in FY26 after the release of its FY25 results, which beat expectations. A decent chunk of the replenishments will be from the delayed New Pantai Expressway (NPE) extension worth RM1.4bil and government housing project in Nusantara, Indonesia, estimated at RM1bil. Other key replenishment opportunities include the Penang LRT, the Penang Airport and road projects in Sabah and Sarawak. For FY25, IJM reported a core net profit of RM526.9mil, up 55.5% year-on-year following recognition of major construction milestones that saw its construction-segment earnings picking up significantly during 4Q25. Otherwise, UOBHK Research said that property sales had softened due to delayed launches, while infrastructure earnings declined due to lower throughput for tolls and ports. The construction segment's order book came in at RM11.1bil, comprising RM6.6bil from local jobs and RM4.5bil from foreign jobs in Singapore and Britain. Total job replenishments for the division stood at RM2.7bil. Meanwhile, Hong Leong Investment Bank Research (HLIB Research) said the recent approval for the long-awaited RM1.4bil NPE extension project will lift the group's order book. 'With this win, IJM has hit 40% of our FY26 contract-win assumption and we anticipate more wins this year mainly from data centres and the Nusantara project in Indonesia. 'On the balance-sheet front, IJM's low net gearing of 0.28 times provides ample space to fund the projects,' HLIB Research said. According to the research house, the NPE extension project will be fully funded by the company with no financial commitment from the government. The 15km extension will be fully elevated, linking three major highways – IJM's existing NPE and Besraya highways – with the upcoming LIKE Expressway. Construction will begin in the third quarter of this year with completion slated in 2029. Once operational, the NPE extension is poised to add to IJM's recurring income stream, said HLIB Research. As for the group's property division, UOBKH Research said total property sales came in at RM1.5bil in FY25 as delayed launches back in 3Q25 resulted in sales coming in at the lower end of IJM's target. Unbilled sales stood at RM1.54bil and going forward, IJM is targeting RM2bil in sales in FY26 in line with its previous guidance prior to the delays. As for the group's British ventures, contributions from its newly acquired JRL Group Holdings Ltd could begin as early as FY26. 'The current construction churn rate for the JRL Group is around £400mil with net margins of between 2% and 3%. 'While JRL is currently loss-making, this is largely due to balance-sheet issues causing project delays, which should be solved via a capital injection,' UOBKH Research said. The research house has a 'buy' rating on the stock with a higher target price of RM3.15 from RM3 before.
The Star
21-05-2025
- Business
- The Star
Shah Alam project bolsters MRCB earnings
PETALING JAYA: The RM2.94bil Shah Alam Sports Complex project awarded to Malaysian Resources Corp Bhd (MRCB) by Menteri Besar Selangor Inc solidifies the company's engineering and construction expertise in large-scale public infrastructure, according to MIDF Research. It said this project builds on MRCB's track record from the successful delivery of the KL Sports City redevelopment in 2017. 'This latest undertaking is expected to enhance MRCB's technical standing, especially in public-sector and sports-related infrastructure,' the research house said, noting that this would be the company's fourth major contract in 2025. It added that projects won by MRCB this year would bolster the medium-term earnings visibility and reinforces confidence in the company's ability to consistently replenish its order book, where the construction order book stood at RM26.1bil as at end-December 2024. For this year, the order book has grown to RM6bil. As the contract sum for the project would be settled via a combination of cash and land, MIDF Research expects that the land swap, to be capped at RM200mil and subject to mutually agreed valuation, could present future upside in replenishing the company's property development inventory and support earnings. MRCB's landbank gross development value (GDV) stood at RM37.8bil as at end-December 2024, with additional parcels such as land in Cyberjaya still pending GDV confirmation. MIDF Research has maintained a 'buy' recommendation on the stock and maintained target price for the shares at 56 sen. It has kept its earnings forecast unchanged pending the release of the company's first quarter ended March 31, 2025 results to be released on May 30. It noted that together with the projects awarded this year and the reinstatement of five LRT stations, the latest project underscores the recommendation.
The Star
20-05-2025
- Business
- The Star
Latest MRCB project win lifts order book closer to RM6bil
PETALING JAYA: The announcement that Malaysian Resources Corp Bhd (MRCB) has been awarded the contract to build the Shah Alam Sports Complex brings the property and construction company's order book closer to the RM6bil target for this year, analysts say. The contract from Menteri Besar Selangor Inc (MBI) was announced last Friday. The project value of RM2.94bil exceeded the company's earlier guidance of RM1.5bil as the scope of work has widened and takes MRCB's order book to RM5.4bil. Analysts at Hong Leong Investment Bank Research (HLIB Research) and CIMB Research have maintained their 'buy' calls on the stock, with target price of 67 sen and 83 sen, respectively. HLIB Research said MRCB's total year-to-date order book far exceeded its assumption of RM4bil for this year and now expects the order book to rise to RM6bil with core profit after tax and minority interest tweaked by minus 0.9% for this year and 2.5% for 2026 while expecting earnings of RM88.7mil for 2027. The research house said management anticipates a pre-tax profit margin of 5% from the project with financing costs baked into the contract value. Terms of payment for the 48-month project would be through a land swap not exceeding RM200mil subject to agreement, with the remainder in cash. MRCB's management shared that the payment would be on deferred basis. HLIB Research said the deferred payment would likely result in the company having a higher net gearing that currently stands at 0.27 times. It said MRCB would likely manage its balance sheet through asset disposals to free up cash while there could be the potential conversion of the KL Sentral redevelopment project later this year that may boost the order book to beyond the RM10bil mark. CIMB Research said, given the highly specialised nature of the project, the contract could fetch a fairly attractive operating margin of between 5% and 8% minus financing costs with minimal execution risk given MRCB's track record. Construction is scheduled to begin in November for a targeted completion in 2029. The research house said that the three-fold increase in the contract value comes with a far lower funding risk as most of the construction work would be paid in cash apart from the 7% to be paid through a land swap versus the initial value to be paid entirely through a land swap. The research house said MRCB also has sufficient balance-sheet headroom and the option to monetise non-core assets if needed. CIMB Research said, despite MRCB's year-to-date project wins meeting 90% of the company's order book target of RM6bil, it was maintaining its earnings forecasts for now pending the detailed design and project specifications expected in six months time.
The Star
24-04-2025
- Business
- The Star
IJM acquires 50% stake in JRL Group to boost UK presence
PETALING JAYA: IJM Corp Bhd has completed its acquisition of a 50% equity stake in JRL Group Holdings Ltd for £50mil (RM283mil), via the subscription of new ordinary shares in the UK-based contractor. IJM said the acquisition enhances its core construction capabilities and complements its existing RM6bil order book. 'JRL's in-house delivery model — spanning key divisions such as Midgard (main contracting), J Reddington (concrete), McMullen Facades, Ark M&E and London Tower Crane Hire — aligns with IJM's ambitions to scale up in the UK construction market. 'It also strengthens JRL's capital base, providing liquidity and supporting the execution of its growing order book and future pipeline.' IJM said the investment supports its broader strategy to diversify revenue streams and expand its international footprint. 'The UK remains a key focus for the group, with active investments across property, construction and urban regeneration. 'JRL's track record and capabilities — particularly in complex, inner-city and infrastructure-linked sites — align with IJM's focus on high-value, transit-oriented developments.' IJM added that this strategic move integrates its development experience with JRL's contractor expertise, optimising the value chain and reinforcing the group's foothold in a mature market. 'Headquartered in Borehamwood, Hertfordshire, JRL now marks the beginning of a long-term partnership between two complementary businesses — positioning IJM and JRL to jointly scale capabilities and pursue growth opportunities in the UK,' IJM said. IJM group chief executive officer and managing director Datuk Lee Chun Fai said the completion of this acquisition marks a significant advancement in IJM's UK growth strategy. 'JRL's strong project delivery credentials, specialised technical expertise and solid order book enhance our construction capabilities. 'This enables us to effectively pursue complex, transit-oriented and infrastructure-led developments, aligning with IJM's long-term plans in the UK market.' Meanwhile, JRL Group managing director John Reddington said the finalisation of the partnership marks a major milestone for JRL, which is built on mutual trust developed over years of collaboration. 'IJM's global experience and strategic ambition align with our focus on complex, large-scale delivery. Together, we are well-positioned to unlock new opportunities and drive the next phase of growth in the UK.'
