Positive on Ikhmas Jaya’s new contract

KUCHING: Ikhmas Jaya Group Bhd’s (Ikhmas Jaya) latest contract win of a RM101.8 million flood mitigation project in Kedah boosted its year to date (YTD) wins to RM398 million and its outstanding orderbook to RM991 million.

Last week, the group announced the acceptance a letter of award from the Ministry of Natural Resources and Environment, and the Department of Irrigation and Drainage to undertake a flood mitigation project in Sg Pendang, Kedah and other related works worth a total of RM101.8 million.

The project period will be for a period of 36 months and is expected is contribute positively to the group’s FY18 figures.

In a company report, AmInvestment Bank Bhd (AmInvestment Bank) said the win was a positive development but was within their expectations.

It kept its order book replenishment assumption of RM500 million annually in FY18-20F.

Continuing to like the construction group for the bright prospects in the high-entry barrier piling and foundations segments and strong earnings visibility from a sizeable outstanding orderbook, AmInvestment Bank is maintain their ‘buy’ call on Ikhmas Jaya with an unchanged fair value of RM0.61.

“We project Ikhmas Jaya’s net profit to grow by 55.3 per cent in FY18F from a washout in FY17.

“Subsequently, improved margins should drive another 65.1 per cent rise in net profit in FY19F.”