KUALA LUMPUR: Sunway Bhd's failed takeover of IJM Corp Bhd may have sharpened strategic priorities on both sides, accelerating value-unlocking efforts within IJM while reinforcing Sunway's growth ambitions, analysts said.
Following the lapse of the voluntary takeover offer, research houses broadly agree that IJM is now better positioned to pursue its own path to value creation.
The company has a clearer focus on restructuring and asset monetisation initiatives over the next few years, they added.
RHB Research said IJM retains significant upside potential. This will be driven by initiatives such as a potential listing of its construction division, an exit from its India operations and monetisation of its domestic highway portfolio via a trust structure or separate listing.
"These moves could improve visibility on IJM's standalone value, which is currently clouded by its conglomerate structure," it said.
IJM's earnings growth is expected to remain positive heading into financial year 2027 (FY27), supported by accelerating progress billings from data centre-related projects, which account for 45 to 50 per cent of its domestic order book of about RM8.2 billion.
IJM is also shifting towards more targeted property developments while gradually rationalising its India exposure.
Meanwhile, cargo throughput at Kuantan Port is expected to improve as a key client completes maintenance works.
RHB Research noted that IJM's industry division continues to provide a strong earnings base, contributing 24 per cent of FY25 pre-tax profit and recording a four-year compounded annual growth rate of 29 per cent, supported by its Bestari Jaya automated spun pile factory.
Hong Leong Investment Bank Bhd (HLIB) said the failed takeover lengthens the value crystallisation timeline for IJM shareholders but has also created greater urgency for its management to execute its plans.
"These include highways monetisation, listing of its construction arm and India portfolio rationalisation," it said, adding that execution remains key to unlocking value.
The firm noted that IJM's construction arm is valued at about RM2.0 billion under its sum-of-parts valuation, with further upside dependent on stronger margins, consistent data centre job wins and a solid order book pipeline.
On the property front, it flagged weaker performance due to softer sales and higher costs, with the group now shifting towards faster-turnaround projects and land monetisation to improve returns.
Infrastructure remains a longer-term catalyst, with plans to partially monetise mature toll assets, although this may only materialise after the completion of the NPE extension in 2029.
Despite trimming its FY26 to FY28 earnings forecasts due to higher input costs and external uncertainties, the firm maintained a "Buy" call, citing improving earnings visibility and stronger execution urgency following the failed takeover.
On the other hand, RHB Research said Sunway's unsuccessful bid should not deter its expansion plans, noting that the group remains actively on the lookout for both organic and inorganic growth opportunities.
The offer, which garnered acceptances of 33.43 per cent, fell short of the required threshold, leading to its withdrawal.
Nevertheless, Sunway's earnings outlook remains supported by its core businesses.
Its growth will be driven by a more aggressive construction order book replenishment target of RM6 billion versus RM5.2 billion achieved in FY25, as well as higher property launches and a sales target of RM4.2 billion.
Additional support is expected from the expansion of its healthcare segment and its recent acquisition of MCL Land in Singapore.
RHB Research highlighted Sunway's solid execution track record, with core net profit rising from RM461 million in FY20 to RM1.16 billion in FY25.
It added that the takeover attempt reflects Sunway's appetite for sizeable acquisitions, supported by a cash pile of about RM1.1 billion to RM1.2 billion, and that the group is likely to continue pursuing strategic assets, landbank and investment properties.
RHB Research maintained a "Buy" call on Sunway with a slightly lower target price following adjustments to its healthcare stake and a wider discount applied to its property division.