WCT announced that it has secured a contract for the proposed widening of a portion of the PLUS highway between Nilai and Seremban from UEMB-MRCB JV. The contract, valued at RM391m, includes a provisional sum of RM10m and prime cost sum of RM216m.

RM1.1bn in new jobs YTD. We deem the announcement within our expectation. The new contract boosts WCT's jobs win YTD to RM1.1bn. The group's outstanding orderbook now stands at approximately RM2.5bn. We continue to peg both our FY12 and FY13 orderbook replenishment targets at RM1.5bn p.a. and leave our core assumptions unchanged.

Jobs momentum likely to pick up. We believe WCT's jobs flow momentum is likely to pick up over the next few months, with its tenderbook now amounting to close to RM5bn. These include foundation works for the USD8bn Kuala Lumpur International Financial District covering a total land area of 30ha, some station packages for the Klang Valley My Rapid Transit Sungai Buloh-Kajang line, as well as a RM900m 400-bed hospital in Sabah. Management indicated that activities at its overseas operations may also pick up, with some potential infrastructure jobs from Oman, the UAE and Qatar.

BUY. We continue to like WCT's three-pronged approach to expand its property development, investment and management activities by leveraging on its engineering and construction expertise. Meanwhile, the Paradigm Mall launched recently has been a success, achieving a tenancy rate of over 90%. Maintain BUY, at an unchanged FV of RM3.10, based on a 14x FY12 PER.

Source: OSK