Concurrently, it said builders’ job flow should accelerate with the roll-out of the Mass Rapid Line 3 (MRT3), Penang Light Rail Transit, various flood mitigation projects as well as private-sector projects such as new data centres and semiconductor foundries.
“Sunway Construction Group Bhd raised its guidance for new job wins in the financial year 2024 (FY2024) to RM3 billion from RM2.5 billion previously.
“While WCT Holdings Bhd has not secured any new key jobs in FY2023, it also guided for bullish new job wins of RM3 billion,” it said.
IJM Corporation Bhd’s year-to-date (YTD) FY2024 new job wins of RM3.62 billion have already exceeded its RM3 billion projection and Kenanga said it expects RM4.6 billion job wins in FY2025.
Additionally, it said Kerjaya Prospek Bhd has secured a total of RM377.9 million YTD job wins against the assumption of RM1.5 billion, and Kimlun Corporation Bhd has secured YTD new jobs of RM133.6 million in FY2024.
In a note today, Kenanga Research highlighted that there was a significant improvement in the sector’s earnings delivery against its expectations in the fourth quarter of the calendar year 2023 (Q4 CY 2023).
“IJM’s nine-month FY2024 results beat our forecast due to better property billings, while Sunway Construction’s FY2023 results surpassed our forecast on robust progress billings.
“Kimlun’s FY2023 results beat our forecast although not significant in absolute terms, given its much-reduced earnings base,” it noted.
Kerjaya’s FY2023 core profit leapt 20% on higher construction and property billings.
On the flip side, the building material sector saw a deterioration in earnings delivery in the recently concluded Q4 CY 2023 reporting season.
Engtex Group Bhd, OMH Holdings Ltd and United U-Li Corp Bhd’s performance were weighed down by high-cost inventories, while Press Metal Aluminium Holdings Bhd’s results came in within Kenanga Research’s expectation, thanks to higher average selling price.
“There has not been any significant pick-up in demand for aluminium despite China’s reopening and its government’s efforts to stabilise the property market,” the research house said.
Nevertheless, it said the rising environmental concerns prompting the closure of fossil fuel-powered smelters, especially coal, coupled with Western sanctions against Russian aluminium are expected to keep aluminium prices firm.
YTD, London Metal Exchange’s aluminium prices averaged at US$2,195 (RM10,280.28) per tonne, which is 1% higher than US$2,178 (RM10,200.66) per tonne in the second half of CY2023 (H2 CY2023).
Meanwhile, the average price of silicon manganese of US$910 (RM4261.98) per tonne is 2% higher than US$890 (RM4168.31) per tonne in H2 CY2023.