KUALA LUMPUR: RHB Research has upgraded WCT to Buy from Sell with a target price of RM1.75, it said in a note on Monday.
The research house said that WCT is poised to garner a slice of action in the buoyant construction sector given its strengths in large-scale earthworks and the construction of roads and retail mall-anchored integrated property projects.
"WCT’s news flow over the past month has been mixed.Coupled with a generally weak stock market in Malaysia, the market has reacted by sending WCT’s share price down by 13% to RM1.47 from RM1.68 on 26 Feb 2015, effectively wiping off some RM229m market value. We believe value has emerged for WCT," it said.
It believed that there is a growing case for, literally, a “paradigm” shift in our valuation methodology for WCT, given the massive new landbank WCT has amassed in recent years, and two sizeable shopping malls it has built.
In terms of profit breakdown by division, in FY14, construction, property development and property investment contributed 45%, 35% and 20% respectively, vs 66%, 23% and 11% respectively in FY11.
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