Tuesday 19 March 2013

WCT Berhad - Clinches RM315m Putrajaya office job


News  Yesterday, WCT announced that it had bagged a commercial office job worth RM315m from Putrajaya Holdings Sdn Bhd.

 The work scope includes the construction of two blocks of commercial offices comprising 7-storey podium offices and an overall 14-storey tower and two levels of basement car park and is scheduled to be completed within 32 months.

Comments  The RM315m contract award from Putrajaya Holdings is the first contract award for WCT in FY13 and it was not of a surprise to us as management had been actively tendering for projects in the Middle East, Klang Valley and Johor regions. To recap, WCT has secured around RM2.0b worth of contracts back in 2012 i.e. the Miti building (RM300m), North-South Expressway Widening (RM391m) and a 80% stake in Batinah Expressway, Oman (RM1.0b).

 We are neutral on the contract award as it came in within our expectations, making up 32% of our RM1.0b order book replenishment assumption for FY13 itself.

 With this new contract award, WCT’s outstanding order book (external) currently stands at c.RM3.4b, translating into 2.2x its FY12 revenue and could last it for the next two years.

Outlook  Moving forward, we believe that WCT will be able to secure more projects given its strong track records locally and internationally.

 We strongly believe that 2013 will be an exciting year for WCT given its massive outstanding order book of RM3.4b above and the operation of its Intergrated Complex namely Gateway@KLIA2.

Forecast  There are no changes to our earnings estimate given that the contract award falls within our order book replenishment assumption of RM1.0b for FY13.

Rating   Maintain OUTPERFORM
 We are maintaining our OUTPERFORM rating on WCT as we expect the stock to be one of the best construction winners after the election event.

Valuation  There are no changes in our Target Price of RM2.52, which is based on a SOP valuation.

Risks  Delays in executing its order book.

Source: Kenanga

No comments:

Post a Comment