WCT Holdings announced that it has been awarded a RM70.4m contract by 1MDB Real Estate Sdn Bhd for the proposed earthworks for Lifestyle Quarter for Phase 1 of the Kuala Lumpur International Financial District in Tun Razak Exchange (Bursa Malaysia).

Comments: This is a second local contract that WCT has secured this year after a slow start. Including the Kwasa Damansara Township project, WCT has secured RM197.8m local contracts year to date. Adding this to its RM879m share of works for the Lusail development project in Qatar, total new contracts secured year to date is 1.08bn. This is just 54% of its RM2bn target for new contracts in 2015, sufficient to replenish its current construction order book of RM3.4bn. We are reviewing our earnings forecasts as the new local contracts will potential lift earnings by 4-5% in FY16E. Maintain BUY with RM1.64 target price, based on 20% discount to RNAV.

Source: Affin Hwang Capital Research - 6 Oct 2015