WCT announced that it has secured a RM282.6m subcontract for the West Coast Expressway project from IJM Corp. The construction period is 36 months. (Source: Bursa)

Comment: This continues WCT’s winning streak after securing another RM315.6m contract for infrastructure works at Petronas’ RAPID project last week. The two new projects will increase the new local year-to-date contracts secured to RM1.82bn. No change in our FY16E core EPS forecasts (+69% YoY) as we have assumed WCT will secure RM2bn worth of new local contracts in FY15-16E.

But this will improve earnings visibility as 91% of our new contract target has been achieved. Including the RM0.97bn Lusail project in Qatar clinched earlier this year, total new contracts secured is RM2.8bn, exceeding WCT’s target of RM2bn. We reiterate our BUY call on WCT with RM1.84 target price, based on 20% discount to RNAV.

Source: Affin Hwang Capital Research - 17 Nov 2015