INVESTMENT HIGHLIGHTS

• WCT has accepted the award for construction of mixed development project issued by Impian Ekspresi Sdn Bhd

• Scope includes the construction of nine blocks of office tower and three blocks of service apartment

• Outstanding construction order book increased to RM6.8b

• Maintain BUY with adjusted target price of RM1.13 per share

Secured RM1.8b job. WCT Berhad, a wholly owned subsidiary of the Company has accepted the Letter of Award issued by Impian Ekspresi Sdn Bhd. amounting to RM1.8bn. The job is set for the construction and completion, for parts of the Pavilion Damansara Heights commercial development plan.

Scope. We noted that the works involved the construction and completion of superstructure and substructure works. That includes nine blocks of office tower and three blocks of service apartment on a podium block. The podium block comprises the retail space, mezzanine floors and works to lower ground floor and basement carpark.

Duration. The duration of the job is 38 months and expected to commence in September 2018. Based on this timeline, the entire project is scheduled to complete by October 2021.

Orderbook increased to over RM6.8b. Based on the group’s outstanding order book (announced in 2QFY18), we expect the figure to increase to RM6.8b (+36.0%) following the acceptance of this new contract.

Impact on earnings. We recall that the segment continued to be the main contributor (73.0%) of revenue, owing its strong order book. While this project sends positive signals to future earnings accretion, our longterm outlook remains influenced by the industry-wide sentiment. We noted that industries-wide uncertainties are pronounced thus casting a long shadow on the prospect to clinch sizeable projects in the future.

Source: MIDF Research - 19 Sept 2018