Analysis, Pages 5 (1030 words)
In the year ending March 21, 2018, IJM Corp Bhd is targeting RM1.6 billion in property sales.
Here, its chief executive and managing director, Datuk Soam Heng Choon, said in a group interview at Invest Malaysia 2018 that this was higher than its total property sales in the previous financial year, which was RM1.4 billion.
“We are quite confident that, given the sales we have already achieved in our first half ended September 30, 2017, we will be able to achieve this goal.
“We see some challenges in making the purchaser in the lower end market get the right financing margin.
That said, our township sales in Seremban and Cheras are doing very well, “he added.
Soam said the current unbilled sales of the group’s property division were RM1.9 billion, also as of September 2017. He also shared that IJM Corp is in the final stages of joining the rent to own (RTO) scheme of Maybank Islamic Bhd, HouzKEY.
“We are currently listing one of our properties there.
I can’t reveal which one still receives all the approvals as an Islamic Maybank, but the announcement would soon be made.
Maybank partnered five prominent property developers to offer homes in Kuala Lumpur and Selangor for the pilot launch, namely SP Setia Bhd, Eco World Development Group Bhd, Mah Sing Group Bhd, Sime Darby Property Bhd and Gamuda Land.
While its property division has always been its key sector, Soam said the construction sector has now catch up.
“We see the construction sector contributing some 30 percent to our profits as of September 2017, while the property division is around 16 percent.
“That said, property is a very cyclical, market-based business, while our construction strategy is more about quality than quantity. We are fortunate to have clinched numerous good-quality projects that yield good returns to our shareholders.”
- IJM bags LRT3 underground package contract worth RM1.12b
- IJM Corp Bhd bagged its first construction contract win for 2018 for the Light Rail Transit Line 3 (LRT3) underground package worth RM1.12 billion.
- IJM said the contract was awarded to its wholly-owned subsidiary, IJM Construction Sdn Bhd, by Prasarana Malaysia Bhd.
- “The project involves designing, building and completing underground tunnels, stations, ancillary buildings and other associated works,” said LRT3 in a filing with Bursa Malaysia, connecting Bandar Utama in Petaling Jaya with Johan Setia in Klang.
- Datuk Soam Heng Choon, CEO and CEO of IJM, said the group has a solid reputation for delivering high quality and performance standards in project management, design and construction. This is evident from the finished works in Kuala Lumpur for both the LRT1 and LRT2 projects, he said in a statement.
- “This project is a continuation of our involvement in Klang Valley’s major rail transport networks that include LRT, KTM, Mass Rapid Transit (MRT) and monorail projects,” he said.
- This month’s project is scheduled to start and is expected to be completed in 31 months. Positive contribution to earnings is expected to occur during the 2019 to 2021 financial year period.
- “The RM1.12 billion total contract value has boosted the group’s outstanding order book to a record, all-time high of RM9.7 billion,” IJM said. The group said the project’s risk factors include fluctuation in the price of materials and the availability of skilled labor.
- “These risks could be mitigated, however, based on the IJM project team’s experiences and know-how in undertaking construction projects,” he said. At market close today, IJM’s shares increased to RM2.76 for a RM10 billion market capitalization by 8 sen or 2.99 percent.
Conclusion And Suggestion
Financial Statement Analysis had discussed what actually happened to its assets, earnings, and dividends over 2017 and 2018 IJM CORP BERHAD. There are 5 types ratios had been calculated above which are Liquidity ratio , Asset management ratio , debt ratio , profitability ratio and finally market value ratio . each of this ratios have its own subs.
Liquidity ratio has 2 types which are current ratio and quick ratio. Current ratio in the year 2018 is better compared the other year which is 2017 this is because the amount of liability is higher . Quick ratio also the same , where 2018 was better compared to year 2017.
Asset management ratio has 4 types which are Inventory turnover ratio , Daily sales outcome (DSO) ratio , Fixed asset turnover ratio and finally Total asset turnover ratio . For Inventory turnover ratio year 2018 was better than 2017 because the lower the ratio, the more productive it is. DSO was better in year 2018 than year 2017 due to in year 2018 have shorter time period to return back the money. The faster to pay, the better it is. Third, Fixed asset turnover ratio was better in the year 2017 with the reason of the higher the ratio, the better it is . Total asset turnover ratio was better in year 2017 due to high ratio where when the ratio its high, it will be more efficient to manage the assets .
Debt Management has 2 types which are debt ratio and time interest earned (TIE ) ratio. For the debt ratio, the year 2017 was better compared to 2018. This is because the ratio on that year was low where it shows that this particular year they had low amount of debt compared to the year 2018 . TIE ratio in 2017 was better because the ratio was higher. The higher the ratio , more investments will happen and it can cause high in earnings .
Profitability ratio have 4 types which are profit margin,ROA,BEP and ROE. Profit margin ratio was better in year 2015 due to profit was more than expenses. ROA was better in year 2017 due to higher assets while BEP was better in 2017 compared to 2018. ROE was better in year 2017 due to was able to achieve more profit.
It is the good condition because the stock price is increase. the company must maintain the quality of the product so that the buyer buys shares and continues to be a regular customer. it can be a good investment for the future of the company and grow their business in the further direction.