IJM–Sunway merger: Sunway Berhad’s proposed RM3.15 acquisition of IJM Corporation has sparked a split among analysts. While some highlight the strategic benefits, including larger scale, synergies, and an enhanced GDV and order book, others argue the offer undervalues IJM compared to its fair value, making the share-swap less favorable for shareholders. IJM investors now face a critical decision: accept the immediate offer or hold out for potential long-term value and upside. Let’s take a closer look at what the analysts are saying about this deal.
Analyst View on IJM CORPORATION BHD (3336)
Kenanga
Target Price: RM 3.40 (REJECT Offer)
Analyst’s Perspective
Recommends shareholders REJECT the offer because the RM3.15 price is below their fair value of RM3.40. They argue the share-swap valuation is unfavorable for IJM shareholders due to Sunway’s high PER
Public Investment Bank
Target Price: RM 3.50 (Outperform)
Analyst’s Perspective
Maintains an OUTPERFORM call, viewing the offer positively as it allows IJM investors to benefit from a larger, more diversified group with higher financial heft. Aims to create a leading conglomerate with RM118bn GDV and RM13bn order book. “This enhanced profile is likely to attract greater investor interest and secure lower financing costs due to its larger market capitalisation and stronger credit profile.
UOB Kay Hian
Target Price: RM 3.15 (Buy)
Analyst’s Perspective
Upgraded IJM to BUY, aligning their TP with the offer price. They view the valuations as “fairly attractive” (14.6% premium to last price) but note the offer is slightly below their non-discounted SOTP valuation of RM3.40.
Analyst View on SUNWAY BERHAD (5211)
UOB KayHian
Target Price: RM 6.10 (Buy)
Analyst’s Perspective
EPS and Financial Impact: “Good deal for Sunway.” Core EPS accretion 6-14% for 2026-27 (50.1-100% stake). Adj. Net Profit: FY25F RM1,043m, FY26F RM1,255m, FY27F RM1,354m. Dividend yield FY25F 1.2%.
Management sees potential synergistic value from cost savings and revenue expansion, especially in IJM’s landbank value.” Enlarged assets RM57.8bn, net income RM1.8bn. Improves credit ratings, lowers debt costs (current 3.96%).
Kenanga
Target Price: RM 4.73 (Underperform)
Analyst’s Perspective
Implies 7.5% premium to IJM’s NAV (RM2.93) and 28% to 1-month VWAMP. IJM shareholders may likely REJECT said offer, premised on the offer price being lower than TP of RM3.40 for the stock.” Cash portion (up to RM1.1bn) funded by borrowings/internal funds; dilution 13%-26% to Sunway shareholders.
Risks: Failure of deal; higher-than-expected costs; weak property demand.
MBSB
Target Price: RM 5.34 (Neutral)
Analyst’s Perspective
Slightly earnings accretive (~1%) post-consolidation. Net gearing declines to 0.5x from 0.56x due to enlarged equity base.
Sunway Berhad expects synergies to be created through the enlarged entity with similar businesses namely property development and construction, giving greater economies of scale and cost synergistic benefits.
Property: FY25F sales target RM2.3bn (achieved RM2.1bn YTD). Construction: Outstanding order book RM5.5bn; targets RM3bn replenishment. Healthcare: 5 hospitals, expansion in Penang/Seberang Jaya.
Hong Leong Investment Bank Berhad
Target Price: RM 6.05 (Buy)
Analyst’s Perspective
The acquisition enhances scale across landbank, GDV and construction order book, adds recurring infrastructure income, unlocks synergy potential from integrated development capabilities, and is well timed given Sunway’s stronger share price and an earnings upcycle in property and construction, resulting in an earnings-accretive outcome for Sunway shareholders.
Enlarged GDV RM118bn, order book RM13.8bn, landbank +3,316 acres. Adds toll/ports for recurring income; cost savings from scale/integration.
Property: Strong unbilled sales RM4.5bn. Construction: RM5.5bn order book. Healthcare: SHH listing ahead.