IJM - On The Highway to More Jobs (OSK)

IJM recently received the approval in-principle for the NPE extension while its associate, KEuro, got the go-ahead for the WCE. We estimate that these 2 highway jobs would boost IJM’s orderbook by 65%-70%. IJM has also tendered for the LRT Package B and will be bidding for the MRT elevated portion. Despite these positives, there may be a RM70m provision in 4Q which would cut our FY11 earnings by 16%. We raise our FY12-13 earnings by 1-3% but maintain our NEUTRAL rating.