KUALA LUMPUR: Kenanga Research maintained outperform on WCT Holdings Bhd
with an unchanged target price of RM1.35 following the company's award of construction works on a commercial development in the Tun Razak Exchange (TRX).
WCT announed yesterday they had received a letter of intent for the award of a RM555mil job in TRX from Landlease Projects (M) Sdn Bhd.
"We are neutral on the potential contract award from Lendlease as it is still a letter of intent, despite having a separate preliminary works agreement so that WCT could start work on the land while finalising the contract value.
"Nonetheless, even if it materialises as a contract award, it is still within our order-book replenishment assumption of RM2.0b with no impact to our estimates. We expect the construction of the commercial complex to take up to 4 years."
Kenanga said WCT's order book currently stands at about RM5.7bil after including the contract, which provides earnings visibility for the next 2.5 to three years.
It said the property division has unbilled sales of RM177mil wtih less than one-year visibility and management intends to continue with their repricing strategy to clear existing inventories amounting to GDV of RM624mil.
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