HLIB Research said WCT’s construction segment could remain choppy as its estimated unbilled construction order book stands at RM2.4bil.
PETALING JAYA: Despite slower work progress and sluggish margin recovery, WCT Holdings Bhd
will continue to focus on project execution and cost recovery from completed projects, say analysts.
Hong Leong Investment Bank Research (HLIB Research) said WCT’s construction segment could remain choppy as its estimated unbilled construction order book stands at RM2.4bil, translating to 2.2 times cover on its financial year 2023 (FY23) construction revenue.
“There have been repeated delays for its Subang Airport expansion job worth RM1.5bil, but we expect this to take off in FY24 after Malaysia Airports Holdings Bhd’s (MAHB) operating agreement was signed earlier this year,” it said.
Meanwhile, TA Research is anticipating WCT’s participation in mega projects in Malaysia in the near term, which could significantly boost its order book through more new contracts.
The group is expected to tender for more jobs locally as well as overseas, said the research house in a report yesterday.
HLIB Research noted the group had subscribed to a 49% joint venture (JV) stake in WCT-Bahrain WLL on March 24 to gear up for potential jobs.
On the group’s property segment, HLIB Research anticipates stronger contribution in FY24 as the group achieved sales worth RM846mil.
“Its property investments continue to benefit from higher footfall and rental rates”, the research house said.
According to TA Research, WCT ’s 1Q24 revenue increased by 15.5% year-on-year, driven by higher sales in the property-development division and improved occupancy and rental rates in the property-investment division.”
“WCT is also exploring various value-unlocking initiatives that could catalyse its share price,” HLIB Research pointed out.
HLIB Research maintained its “buy” call on the stock with a target price of 62 sen, while TA Research kept its “sell” call with a target price of 56 sen.
