Company Update

• WCT has emerged as the successful bidder with a winning bid of RM180m for a 12.4-acre freehold commercial land fronting Jalan Skudai in Johor Bahru, Johor, with an abandoned shopping mall. WCT intends to revive and modify the project into a mixed development with a GDV of RM900m.
• While we are mindful of the highly competitive and saturated retail scene in Johor Bahru, we take comfort that: (1) WCT’s up-and-coming mall in Johor Bahru is relatively nearer to Johor Bahru City Centre vis-à-vis peers; (2) Its ability to assemble a portfolio of strong tenants that gives it the firepower to compete and pull the crowds from other existing malls; and (3) The rising population and tourist arrivals in Johor in general driven by the massive Iskandar development.
• Forecasts are maintained as we do not expect meaningful contribution from the project during our forecast period ending FY12/14.
• Fair value is RM2.21. Maintain Underperform

Source: RHB Research - 24 August 2012