KUALA LUMPUR: Shares of IJM Corporation Bhd fell to a low of RM5.08 on Wednesday after its core net profit for the first quarter ended June 30, 2012 was below market expectations.

At 12.30pm, it was down seven sen to RM5.11. There were 590,200 shares done at prices ranging from RM5.08 to RM5.16.

The FBM KLCI was up 1.22 points to 1,648.33. Turnover was 599.47 million shares valued at RM488.59mil. There were 266 gainers, 304 losers and 326 stocks unchanged.

RHB Research Institute has maintained its "Underperform" recommendation on IJM with a fair value of RM5.05.

"The first quarter core net profit of RM98.8mil (excluding RM31mil forex losses and RM21mil disposal gains) came within our expectations at 22% of our full-year forecast but below the market expectations at only 19% of the full-year market consensus," it said.

RHB Research said it was not overly enthusiastic on construction stocks as their share price performance was likely to be capped over the next six to nine months as the market continues to demand a high risk premium for construction stocks.

On Tuesday, IJM announced lower net profit of RM88.8mil, or 6.43 sen earnings per share against RM115.0mil, or 8.51 sen earnings per share in the same period last year.

The lower net profit was mainly due to an unrealised foreign exchange loss of close to RM34mil. Its revenue, however, was higher at RM1.04bil from RM1.03bil achieved a year ago.

RHB Research, meanwhile, said IJM's outstanding construction orderbook, which was RM3.7bil, could increase significantly.

It pointed out the West Coast Expressway (WCE) and New Pantai Expressway (NPE) extension could potentially generate RM4bil worth of new jobs to IJM, more than doubling its existing outstanding construction orderbook to RM7.7bil.

It said at present, the signing of the concession agreement for the RM7.07bil WCE was still pending, while for NPE, IJM intended to "appeal with a revised alignment", following the government's recent decision to "not proceed" with the project.

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