IJM Corp aims to list construction business by 2027, says Kenanga

KUALA LUMPUR (April 23): Fresh from staving off a takeover, IJM Corporation Bhd (KL:IJM) is now aiming to list its mainstay construction business before the end of 2027.

The framework for a listing of a pure-play construction unit is expected to be finalised within the next two months, Kenanga Investment Bank said in a report following a meeting with IJM’s management. Once set, the listing would carry a 12-month timeline, the research house said.

“IJM has established a board-level committee to oversee a three-year asset unlocking exercise,” Kenanga said. “At the management level, IJM is working towards value creation alongside efficiency improvement.”

A takeover offer by Sunway Bhd (KL:SUNWAY) lapsed earlier this month after the much larger conglomerate failed to secure enough interests from IJM shareholders who baulked at the perceived low price.

Since then, IJM has outlined a plan to boost shareholder value, including monetising part of its vast land bank and rationalising its India portfolio, and the sale or listing of the toll road assets.

“The strategic exit from India involves a two-year window to optimise disposal gains,” Kenanga said. “With book value already reflecting market levels, we expect the divestment to be realised profitably without the risk of heavy impairments.”

Meanwhile, the plan for a potential listing or business trust of local toll assets, excluding the West Coast Expressway, may take longer as it requires authority approval over concession ownership, the research house noted.

Kenanga also maintained its ‘outperform’ call and target price of RM3.40 on IJM.

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