PETALING JAYA: WCT Holdings Bhd
is building up its overseas order book at a time when fresh infrastructure tenders in Malaysia remain limited.
Recently, the firm announced its second construction contract in the United Arab Emirates (UAE) via its existing 50:50 joint venture (JV) with Construction General Contracting House Ltd (CGCH).
The subcontract, worth approximately RM926.2mil, involves the construction of six 11-storey residential buildings with a common basement and was awarded by CGCH to the JV entity. The development is owned by Aldar Properties.
Based on the JV structure, MBSB Research estimated WCT’s effective contract value at RM463.1mil. However, the research house has a mixed view on the contract.
“We remain cautiously optimistic as WCT continues to diversify its order book amid the subdued pace of domestic infrastructure contract awards.
“Nevertheless, its expanding presence in the UAE also exposes the group to higher geopolitical and execution risks,” it said in a note.
CGS International (CGSI) Research estimated the gross profit margin for the contract at approximately 9% to 10%.
“We understand there is still a variation clause built in to factor in any further increase in raw material prices arising from Middle East tensions.
“While we acknowledge the higher risks for overseas projects, we are comforted that this is not a new market for WCT and its local partner, CGCH, has been in the construction industry for more than 30 years.”
CGSI Research added that WCT’s presence in the Middle East may have its merits, considering that there are not many local infrastructure projects being tendered in Malaysia. WCT is also not present in any data centre projects with no first-mover advantage, it said.
It is noteworthy that WCT has completed numerous projects in the Middle East, with the last project being the Lusail development in Qatar, which was handed over in 2021.
WCT’s year-to-date contract win tally now stands at RM880mil, lifting its effective unbilled order book to RM2.6bil – about 2.6 times cover on the construction revenue of financial year 2025 (FY25).
Hong Leong Investment Bank (HLIB) Research views WCT’s re-entry into the Middle East as a strategic move.
“In our view, its focus on residential segments and partnership with an established local contractor, CGCH, helps mitigate execution risks.
“Moreover, we reckon a successful delivery of the projects could enhance WCT’s prospects of securing repeat work from Aldar, either directly or through CGCH.”
Meanwhile, MBSB Research expects upcoming order book replenishment from the tender book at above RM14bil, comprising over RM5bil civil and infrastructure jobs and over RM9bil building works.
As it expects a significant portion of recent WCT job wins to be recognised closer to the later stage of the project, MBSB Research has lowered its FY26 earnings estimates by 5% and FY27 estimates by 9%.
It has a “neutral” call on the stock, while CGSI Research and HLIB Research recommend an “add” and “buy”, respectively.
