PETALING JAYA: WCT Holdings Bhd
may see some gains from the upcoming listing of Paradigm Real Estate Investment Trust (P-REIT) on the local exchange.
The group, however, is anticipated to face some challenging times ahead on weak financials that were reported in the recent quarters, said UOB Kay Hian (UOBKH) Research.
The research house noted that WCT’s recent performance has been underwhelming as it has been plagued by high debt levels and the prolongation of construction contracts. This had resulted in losses to the group in 2024.
“The outlook for WCT’s construction segment remains cloudy as project prolongations and higher construction costs have resulted in the segment posting losses for two years running.
“We believe this may be indicative of its upcoming performance in the near-to-medium term.
“Following delays in key projects slated for completion in 2024, we remain cautious on the segment, given the previous inconsistent earnings delivery,” UOBKH Research said.
It also pointed out that the group’s minimal contract replenishments in the year-to-date period would affect upcoming results, which could be similarly weak.
The upcoming P-REIT listing still represents a significant upward catalyst, UOBKH Research noted.
UOBKH Research maintained its “sell” rating on WCT with a target price of 55 sen.
