Investment Highlights

• We maintain our forecasts, FV of RM1.91 based on "sum of parts" (SOP) (Exhibit 1) and HOLD call.

• WCT has been awarded by Kuala Lumpur City Council (DBKL) an elevated highway project connecting Jalan Maarof to Jalan Semantan in KL for RM211.5mil, to be completed within the next 30 months.

• The latest contract has boosted WCT’s YTD job wins to RM1.97bil and its outstanding construction order book to RM6.05bil (Exhibit 2). We are keeping our forecasts that assume job wins of RM2bil annually in FY17-19F. We are positive on the latest development.

• We maintain our 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 RM4bil.

• However, we believe it is premature to tell if the exercise will be value-enhancing 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.

Source: AmInvest Research - 11 Dec 2017