PETALING JAYA: WCT Holdings Bhd
posts core earnings of RM14.6mil for the first half of financial year 2026 (1H26), a 66% year-on-year (y-o-y) drop that misses market consensus by 28%.
Hong Leong Investment Bank (HLIB) Research said the squeeze stemmed from its core construction unit, which flipped into an operating loss due to margin drag from legacy contracts and slow revenue ramp-up on newer overseas projects.
In response, analysts cut the full-year earnings forecasts for fiscal years 2026, 2027, and 2028 by 37%, 8%, and 10%, respectively, and lowered the target price to RM0.67 from RM0.76.
Despite the downgrade, HLIB Research maintained a “buy” call, arguing that the beaten-down stock offers value if WCT can turn around construction margins and convert its massive RM13bil to RM14bil tender book into firm contract wins.
WCT reported its second quarter ended June 30, 2026 (2Q26) results with revenue of RM370.3mil, down 17% quarter-on-quarter and down 33% y-o-y.
WCT reported core profit after tax and minority interests of RM10.5mil (pure operating profits grew 1.5 times from 1Q, but plummeted 66% compared to the same quarter a year ago), bringing 1H26’s sum to RM14.6mil.
“Results were below our 31% and consensus (28%) expectations.
“The shortfall mainly stemmed from continued losses from the construction division,” HLIB Research explained.
Furthermore, the research house said WCT’s unbilled order book stands at a sizeable RM3.7bil, which is 3.8 times what WCT’s construction unit earned in all of 2025, following recent wins in Taiwan and the Middle East.
“WTC’s tender book remains robust at RM14bil, predominantly comprising approximately RM9bil of building works, with the remainder consisting of infrastructure jobs,” HLIB Research said.
