WCT has secured subcontract works worth MYR283m for West Coast Expressway (WCE). We maintain our BUY call and raise our FY15-17 earnings forecasts by 1%, 3% and 2% respectively, and TP by 2% to MYR1.70 (23% upside). WCT will benefit from the booming construction sector. There is also tremendous value in WCT’s landbank and portfolio of REIT-able shopping malls.

Seventh job win this year. WCT has been awarded by IJM Corp (IJM MK, BUY, TP: MYR3.39) a MYR282.6m subcontract for the construction of Sections 3, 4, 5, 8 and 9 of West Coast Expressway (WCE). The latest contract is the seventh key construction job WCT has secured in FY15, boosting its YTD job wins to MYR2.7bn and its outstanding construction orderbook by 6% to MYR5.13bn (see Figure 2). Assuming an EBIT margin of 5%, the contract will earn MYR14.1m EBIT over a 36-month construction period.

Forecasts. We raise our FY15-17 earnings forecasts by 1%, 3% and 2% respectively to factor actual job wins of MYR2.7bn in FY15 vis-à-vis our previous assumption of only MYR2.5bn.

Risks to our view: i) job wins in FY16-17F falling short of our assumption of MYR1.5bn per annum, ii) higher-than-expected input costs, and iii) weak demand for its property launches.

Maintain BUY. WCT is poised to garner a slice of action in the booming local construction sector. We also see tremendous value in the landbank in Kuala Lumpur, Rawang and Johor Bahru that WCT has amassed in recent years, as well as its decent portfolio of REIT-able shopping malls. We raise our SOP-based TP by 2% to MYR1.70 (from MYR1.67) that values its construction business at 14x revised FY16 earnings, in line with our benchmark upcycle 1-year forward target P/E of 14x for mid-cap construction stocks, and its property development business at a 50% discount to its RNAV (see Figure 3).