Report: WCT’s MRT job will not boost current order book

PETALING JAYA: WCT Holdings Bhd’s newly secured RM199.5mil contract from Mass Rapid Transit Corp Sdn Bhd (MRT Corp) will not boost the company’s current order book as it is part of a package that was secured in 2016.

AmInvestment Bank said the award forms part of an MRT viaduct package (Package V204 – from Bandar Malaysia South Portal to Kampung Muhibbah) worth RM896.4mil that WCT secured from MRT Co in November last year.

“The latest job will not increase WCT’s year-to-date job wins of RM1.05bil and its outstanding construction order book of RM5.36bil,” it said in a report yesterday.

“The key difference is, instead of earning an attendance fee amounting to typically 1% to 2% of the contract value, WCT now, as the actual contractor for the stations, will earn construction margins we believe in the high single digit.”

The research house said it is therefore raising the overall margins from Package V204 to 8% from 6% previously.

“We view the latest development positively,” AmInvestment Bank said, adding that it is raising its 2017 to 2019 forecasts by 3% each.

The research house also raised the compa- ny’s fair value by 3% as well to RM1.91 (from RM1.88) based on sum of its parts, but is maintaining its “hold” call.

WCT on Tuesday said its unit, WCT Bhd, had secured a contract to build elevated stations in Kuchai Lama and Taman Naga Emas, Kuala Lumpur.

In November last year, WCT won a RM896.4mil contract to build the viaduct guideway from Bandar Malaysia South Portal to Kampung Muhibbah.

The Kuchai Lama and Taman Naga Emas stations are the next stations after Bandar Malaysia South along the 52.2km Sungai Buloh-Serdang-Putrajaya line.