IJM earnings recovery to drive RM3bn shareholder returns, BIMB says
IJM Corp Bhd’s earnings visibility is strengthening on a visible recovery from its FY26 trough, improving construction margins and a RM3 billion shareholder-distribution programme, according to BIMB Securities Research…
Source: The Star · September 20, 2026 at 8:20 PM · AI-assisted report
Single-sourceMALAYSIA, 20 SEPTEMBER 2026 —
IJM Corp Bhd’s earnings visibility is strengthening on a visible recovery from its FY26 trough, improving construction margins and a RM3 billion shareholder-distribution programme, according to BIMB Securities Research in its initiation coverage.
Market Impact
The group’s 1Q27 earnings will mark the start of a recovery after FY26’s low point, with construction growth underpinned by industrial projects, faster execution and margin expansion, the research house said. The RM3 billion programme—its primary re-rating catalyst—will fund special dividends, asset monetisation and the proposed listing of its Malaysian and Singapore construction operations.
IJM has already resold 142.4 million treasury shares for RM385 million and declared a 10-sen special dividend, with the 3Q27 listing of its construction arm expected to generate RM1.2 billion in proceeds. Further cash flows will come from toll monetisation and its exit from India, BIMB noted.
Construction pipeline shifts to higher-margin industrial projects IJM’s RM14.5 billion construction order book provides 4.1 times FY26 revenue coverage, with a strategic shift toward higher-value industrial buildings—data centres, semiconductor facilities and advanced-manufacturing plants—now accounting for 55% of its RM7.2 billion Malaysian backlog. These projects offer shorter execution periods and better margins than traditional contracts.
Property earnings weakened in FY26 due to lower sales, the absence of Penang land-sale gains recognised in FY25, and higher operating costs from investment properties and new developments in Malaysia and the UK. However, IJM is rationalising its overseas exposure, particularly in India, while maintaining long-term UK opportunities through its network rail joint venture.
Infrastructure assets provide recurring cash flows IJM’s toll-road concessions—including the Sungai Besi Expressway, Kajang-Seremban Highway, and West Coast Expressway—deliver stable earnings, though reported figures fluctuate due to amortisation, financing costs and traffic variations. Its 60% stake in Kuantan Port, a key bulk-cargo gateway for the Malaysia-China Kuantan Industrial Park, saw throughput drop to 20.6 million tonnes in FY26 (from 24.3 million in FY25) due to maintenance at Alliance Steel, a major customer.
BIMB said the underlying infrastructure remains intact. Industry division aligns with construction growth themes IJM’s industry segment—consisting of tolls, Kuantan Port and other assets—has become more strategically relevant as its construction pipeline concentrates on data centres, industrial buildings and infrastructure. The division’s earnings are less volatile than property but benefit from the same structural tailwinds.
BIMB maintains a "buy" rating on IJM, with a RM3.47 price target—implying 22.2% upside—and highlights attractive dividend returns as the group executes its shareholder-return programme. The research house expects investor engagement to intensify, with quarterly briefings replacing the previous half-yearly updates.
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