KUALA LUMPUR, Jan 18 ― IJM Corporation Bhd (IJM) will have an immediate presence in the rail electrification space following the involvement of its unit IJM Construction Sdn Bhd as part of the joint venture (JV) with Pestech Technology Sdn Bhd that was selected by Malaysia Airports Holdings Bhd (MAHB) to complete the Kuala Lumpur International Airport (KLIA) aerotrain replacement project, said Kenanga Investment Bank Bhd.

In a note today, Kenanga said that the job is IJM’s stepping stone to rail electrification projects by sharpening its competitive edge for upcoming mega rail projects.

"We maintain our forecasts, target price (TP) of RM2.31 and ‘outperform’ call,” it said.

The research house said that Alstom will be the project coordination lead and supplier of the rolling stock, while IJM-Pestech JV will be in charge of civil engineering and electrification works worth RM175.6 million.

"The split 60:40 between IJM and Pestech. Therefore, IJM’s portion is RM105.4 million. The project will commence with immediate effect, to be completed by Mar 2025,” it said.

While 60 per cent, or RM105.4 million, is relatively small to IJM, Kenanga said that they are positive on the contract re-appointment as well as the partnership as it gives IJM an immediate presence in the rail electrification space.

"It will be able to strengthen and widen its potential roles in the impending mega rail projects such as MRT3 and Bayan Lepas LRT Line,” it said.

At today’s lunch break, IJM’s shares were down by three sen to RM2.08 with 1.83 million shares traded. ― Bernama