BUY: We reaffirmed our "buy" call and maintained our target price of RM10.20 for IJM, taking into account its firm fundamentals in the global construction sector.

While share prices of most construction outfits continue to suffer from poor sentiments due to delays, the bulk of IJM's new jobs is overseas projects that are on track in terms of development and delivery. The group's construction order book of over RM6 billion is mainly derived from the growth markets in the Middle East and South Asia.

Its plantation division earnings will be spurred by strong crude palm oil prices, while its property projects with total gross development value of more than RM6 billion will underpin earnings growth. IJM recently received a letter of intent from Tamouh Investments LLC in the United Arab Emirates for the construction and completion of phase one of a hotel on Al Reem Island in Abu Dhabi for about RM840 million.

The project, undertaken on a 70:30 joint-venture basis with LFE Corp Bhd, is expected to generate a net profit of some RM60 million for IJM over the next two years.

Valuations for IJM are undemanding at current price levels, with prospective FY2009 (FY ends Dec 31) and FY2010 PER multiples of 11.6 times and 10.1 times respectively. — ECM Libra (April 15)