IJM Corporation Bhd saw its shares fall 6.73 per cent in early trading on Thursday, following the announcement of a decline in its net profit to RM86.88 million for the first quarter of 2024. By 10:41 a.m., IJM's share price had dropped 21 sen to RM2.91, with 13.09 million shares traded, bringing the company's market capitalisation to RM10.58 billion.
In a statement released to Bursa Malaysia yesterday, IJM reported that its net profit for the first quarter ended 30 June 2024 (Q1 FY2025) had decreased to RM86.88 million, compared to RM100.64 million during the same period last year. Despite the drop in net profit, IJM's revenue increased by 14.6 per cent to RM1.40 billion in the quarter under review, up from RM1.23 billion previously.
RHB Investment Bank Bhd has revised its earnings forecast for IJM for the full financial years 2025 to 2027, reducing them by three per cent, four per cent, and four per cent, respectively. This adjustment is based on a more cautious outlook for IJM's property segment. The bank has also updated its valuation base year to the financial year 2026 forecast, resulting in a new target price of RM4.39, up from RM4.34.
Despite the downward revision in earnings forecasts, RHB Investment Bank maintained a "buy" recommendation on IJM. The construction company posted a core profit of RM98 million in the first quarter of the financial year 2025, surpassing the bank's expectations. Public Investment Bank Bhd also expressed confidence in IJM's outlook, noting that the company is well-positioned to deliver better performance in the financial year 2025. This optimism is supported by IJM's solid order book and the anticipated influx of new projects, driven by opportunities in infrastructure development, data centres, and the industrial property sector.
To date, IJM has secured new contracts worth RM1.9 billion, representing 37.1 per cent of its RM5.0 billion target for the financial year 2025. Public Investment Bank Bhd remains optimistic about IJM's growth prospects, particularly in its construction segment, and has maintained an "outperform" rating with a target price of RM4.20.