PETALING JAYA: Despite a 94% plunge in WCT Holdings Bhd
’s net profit for the third quarter of this year (3Q25), analysts are cautiously optimistic that the group will be able to strengthen its earnings in the coming quarters.
MBSB Research said it anticipates earnings contributions to strengthen supported by progressive recognition from its contracts for widening the North-South Expressway and ongoing work on the first and second phase of the Pavilion Damansara Heights development.
The group’s order book stood at RM2.32b as of September, providing strong earnings visibility through to 2027.
The research house said it expects a significant portion of the construction group’s order book to be recognised by next year, driven by the completion of work on Pavilion Damansara Heights, alongside the recently secured North-South Expressway project worth RM359mil.
Year-to-date, group’s tender book exceeds RM11bil, comprising RM10bil in civil and infrastructure work and RM1bil in building work.
The research house said, despite limited external project wins in recent years, WCT’s management has intensified efforts and allocated additional resources to secure new jobs both domestically and overseas.
MBSB Research maintained its “buy” call on WCT with a revised target price of 79 sen.
WCT’s net profit for 3Q25 plummeted 94% year-on-year (y-o-y) to RM10.5mil. This translates to earnings per share of 68 sen. Revenue for the period increased by 10% y-o-y to RM482.6mil.
For the first nine months of this year, the group’s net profit fell 83% y-o-y to RM37.8mil or earnings per share of 2.43 sen. Revenue rose 18% y-o-y to RM1.5bil, mainly driven by higher sales and billings in the property development segment, as well as revenue from sale of land.
Kenanga Research said it believes WCT is poised for a brighter earnings outlook, on the impending roll-out of various public infrastructure projects.
These include the Penang International Airport expansion project, Pan Borneo Sabah Highway, Subang Airport Regeneration plan, Penang Mutiara Light Rail Transit system, Johor Baru’s elevated Autonomous Rapid Transit project, and various government hospitals.
The research house added that a de-gearing exercise by WCT should strengthen its balance sheet, enabling growth in its property development segment through value-enhancing projects.
The research house maintained its “outperform” call, and sum-of-parts derived target price of RM1.25.
CGS International Research (CGSI Research) said that while it believes WCT is being more aggressive in terms of construction tenders, with a tender book of RM11bil as of Nov 25, this has yet to translate into any material wins.
According to CGSI Research, WCT’s management said during its 3Q25 results commentary, it had allocated additional resources to secure new jobs both locally and overseas to replenish its order book.
The research house said the group would also be re-establishing its positioning in the Middle East where there are outstanding tenders worth a few billion ringgit and projects with superior margins versus locally.
The research house reiterated its “add” call and a target price of RM1.28.
Re-rating catalysts include better earnings delivery, and more new orders. While downside risks are earnings disappointments from its construction division, and lower property sales.
