9M15 results missed expectations. We cut our FY15F earnings by 13%.Maintain BUY and a MYR1.70 TP (13% upside). WCT is expected tobenefit from the booming construction sector. There is also tremendous value in its landbank amassed in Kuala Lumpur, Rawang and Johor Bahru in recent years, coupled with its portfolio of REITable shopping malls.

A slow 9M15. WCT’s 9M15 core net profit of MYR28m (excluding forex and disposal gains) missed expectations, coming in at only 31%/22% of our full-year forecast and consensus estimates respectively. We believe the key variance against our forecast came from the lower-thanexpected construction billings and margins.

Strong job wins. YTD, WCT has secured MYR2.7bn new jobs while its outstanding construction orderbook stands at MYR4.85bn (see Figure 4). During an analysts briefing in August, WCT cut its FY15 property sales target by 10% to MYR584m (vis-à-vis MYR461m achieved in FY14) largely to reflect the deferment of a residential project in Kota Kinabalu, Sabah. FY15 property sales will be backed by sales from existing stocks as well as MYR505m new launches in FY15, including MYR198m medium-cost apartments under the “Selangorku Homes” state public housing programme.

Forecasts. We cut our FY15 earnings forecast by 13% to factor in the lower construction billings and margins .

Risks to our view: i) job wins in FY16F-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 keep our SOP-based TP at MYR1.70 that values its construction business at 14x FY16F 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 5).