WCT’s DBKL elevated highway project win a positive development

KUALA LUMPUR: WCT Holdings Bhd’s (WCT) Dewan Bandaraya Kuala Lumpur (DBKL) elevated highway project win has been viewed as a positive development, with analysts noting that this latest contract boosts the group’s year to date (YTD) job wins to RM1.97 billion.

In a filing on Bursa Malaysia, WCT’s board of directors announced that wholly-owned subsidiary WCT Bhd has been awarded a project by DBKL with the commencement date on December 11, 2017 to undertake an elevated highway project for a contract sum of approximately RM211.52 million.

The group noted that the works under the contract are expected to be completed within the duration of 30 months.

“The latest contract has boosted WCT’s YTD job wins to RM1.97 billion and its outstanding construction order book to RM6.05 billion,” AmInvestment Bank Bhd (AmInvestment Bank) observed.

The research firm, which was positive on the latest development, kept its forecasts that assume job wins of RM2 billion annually in financial year 2017-2019 forecasts (FY17-19F).

Meanwhile, AmInvestment Bank maintained its view that WCT will ultimately be turned into the flagship PLC of Tan Sri Desmond Lim, via the injection of Malton (a sister company of WCT, with its prized asset being Pavilion Bukit Jalil) 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,” the research firm said.

However, AmInvestment Bank believed it is premature to tell if the exercise will be valueenhancing to WCT’s existing shareholders, as that depends largely on the structure and pricing of the assets and new shares to be issued pursuant to the corporate exercise.

Aside from maintaining its forecasts, the research firm also retained its fair value of RM1.91 per share and a hold call on WCT.