AmInvestment maintains forecasts on WCT following win in AEON dispute

KUALA LUMPUR: AmInvestment Research has maintained its hold call, forecasts and fair value of RM1.38 on WCT Holdings following the High Court's finding in favour of WCT in its dispute with tenant Aeon Co. (M) Bhd.

In the dispute involving the extension of the tenancy of AEON Bukit Tinggi Shopping Centre, the court ruled that AEON will have to vacate the property and pay WCT damanges calculated from Nov 23, 2017 to the date of vacant possession.

"We are slightly positive on the latest development. We believe that the court’s decision has strengthened WCT’s bargaining position vs. AEON, assuming that there is still a chance that the parties would attempt to reach an amicable out-of-court settlement," said AmInvestment Research.

The research houses added that it believes WCT will be able to find a replacement for AEON as the anchor tenant for the mall if required. 

It estimates that the mall contributed RM32mil or 11% of WCT's total earnings before interest and taxes.

The research house said while WCT's construction division has turned the corner, its property division remains weighed down by about RM550mil of unsold stock and missed the window to list its matured investment properties under a REIT. 

"All these, coupled with WCT's proposed placement of new shares of up to 10% of its existing paid-up capital, are likely to cap the upside in WCT's share price over the near term," it said.