IJM Corporation Bhd, which has secured contracts in excess of RM1.2 billion in India, Pakistan and the Middle East for the calendar year-to-date, is expected to continue adding to its order book in the months to come, said ECM Libra Investment Research

The construction of Phase 1 of a hotel development on Al Reem Island in Abu Dhabi for about RM840 million should generate about RM60 million in net profits to the group over the next two years.

ECM Libra Research said while share prices of most construction-related companies continued to suffer from poor sentiment owing to concerns of delays in implementation of projects domestically, the bulk of the group’s new projects had been secured from overseas and these were firmly on track in terms of development and delivery.

“The group continues to be significantly exposed to strong construction growth areas of the Middle East and South Asia in addition to its entrenched presence in Malaysia (total construction order book in excess of RM6 billion),” it said.

It added that IJM’s plantations earnings would be spurred by expectedly strong crude palm oil prices in the intermediate term, and its property development projects with gross development value in excess of RM6 billion would underpin earnings growth for a few years yet.

ECM Libra Research reaffirmed its buy call on IJM at RM6.35 and maintained its realised net asset value (RNAV)-derived target price of RM10.20. “Valuations are undemanding at current price levels, with prospective FY09 and FY10 price-to-earnings multiples of only 11.6 times and 10.1 times respectively,” it said.

At yesterday’s close, IJM fell five sen to RM6.30 with 734,900 shares done.