WCT was awarded RM127.4m contract by Kwasa Land Sdn Bhd for the construction of common infrastructure works at Kwasa Damansara Township Development in Sungai Buloh, Selangor (work package contract: WPC1A). The construction period is 104 weeks and date of completion is 8 October 2017. (Source: Bursa Malaysia)

Comment: WCT has been bidding aggressively for new contracts to replenish its domestic construction order book and getting a work package in the Kwasa Damansara project will provide a foot in the door for future work packages in the development measuring over 2,000 acres. Assuming pre-tax profit margin of 5% for the project will contribute about RM4.8m net profit in FY16-17 and potential enhance earnings by about 1.7% in FY16. We maintain our earnings forecasts for now. Maintain our BUY call with RM1.64 target price, based on 20% discount to RNAV.

Source: Affin Hwang Capital Research - 21 Sep 2015