WCT’s LRT3 job boosts YTD job wins to RM1.69 billion

KUCHING: WCT Holdings Bhd’s ( WCT) latest Light Rail Transit 3 ( LRT3) job has been viewed positively by analysts as the project has potentially increased the company’s year to date (YTD) job wins to RM1.69 billion.

Its outstanding order book is also estimated to be at RM6 billion, which could provide earnings visibility for the next two to three years.

AmInvestment Bank Bhd’s research arm (AmInvestment) in a report highlighted this and noted that the latest contract is WCT’s fourth major one in FY17, boosting its YTD job wins to RM1.69 billion and its outstanding construction order book to RM6 billion.

“We are keeping our forecasts that assume job wins of RM2 billion annually in the financial year 2017 ( FY17) to FY19 forecast ( FY19F). We are positive on the latest development,” it said.

In another note, Kenanga Investment Bank Bhd’s research arm ( Kenanga Research) said it is neutral on the development as the job win is within its order book replenishment estimate of RM2 billion for FY17.

Nevertheless, it noted, “Its outstanding order-book is raised to circa RM6 billion from circa RM5.4 billion after the above contract award, providing earnings visibility for the next 2.5 to three years.”

As for its property division, Kenanga Research said, WCT’s unbilled sales stands at RM487 million with 1.5 years visibility and the company intend to continue with its re-pricing strategy to clear its existing inventories amounting to a gross development value ( GDV) of RM644 million.

All in, the research team reiterated its ‘market perform’ rating on the stock in view of its steady earnings performance coupled with a lighter balance sheet and improving prospects.

AmInvestment maintained its ‘hold’ call on the stock.

Meanwhile, it maintained its view that WCT would ultimately be turned into the flagship PLC of Tan Sri Desmond Lim, via the injection of Malton and Lim’s private business ventures including Pavilion Kuala Lumpur and Pavilion Damansara Heights.

“This could potentially double WCT’s market capitalisation to above RM4 billion.