PETALING JAYA: Analysts believe WCT Holdings Bhd
is striking a fair deal in acquiring the remaining 30% stake in Jelas Puri Sdn Bhd (JPSB), but think the transaction is unlikely to materially boost the group’s near-term earnings.
MBSB Research said the acquisition gives WCT full control of JPSB and greater flexibility over its assets, but it is not expected to be earnings accretive in the near term, underpinned by JPSB’s net loss of RM7.5mil in financial year 2025 (FY25).
It added the benefits of the acquisition are likely to be realised over the longer term, with the group’s property earnings supported by RM1.02bil in unbilled sales and planned FY26 launches with a combined gross development value of RM1.54bil.
“We anticipate earnings contributions to remain under pressure in the coming quarters, partially supported by stronger progress billings from ongoing infrastructure projects, particularly the PLUS highway expansion works and Pavilion Damansara Heights phase two,” it explained.
Accordingly, the research house maintained its “neutral” rating on WCT with an unchanged target price of 43 sen a share, based on an 11 times FY27 forecast price-to-earnings multiple.
In contrast, Hong Leong Investment Bank (HLIB) Research was more upbeat on the transaction, noting increased effective ownership in Paradigm-real estate investment trust (REIT), greater scope to monetise assets and a fair valuation.
“Financially, the transaction increases WCT’s effective interest in Paradigm-REIT, allowing it to enjoy a larger share of distributions.
“Also, obtaining full control of Le Méridien PJ gives WCT greater flexibility to monetise the asset via a potential divestment or injection into Paradigm-REIT,” it highlighted.
From the perspective of Employees Provident Fund, HLIB Research said the fund retains sufficient exposure through its roughly 8% direct stake in Paradigm-REIT, making the divestment a logical move.
