WCT up 4% on RM652m Boustead Ikano construction project

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KUALA LUMPUR (Oct 30): WCT Holdings Bhd rose as much as 4% on news it clinched a RM651.62 million retail property construction project from Boustead Ikano Sdn Bhd.

Yesterday, WCT said the planned shopping centre along Jalan Cochrane was due for completion in the second half of 2016.

Today, WCT climbed as much as eight sen to RM2.18 with 521,800 shares done. WCT later reduced gains at RM2.14 at 10.19am.

For comparison, the FBM KLCI added 0.86 point or 0.1% to 1,840.41.

Public Investment Bank Bhd analyst Tan Siang Hing said in a note today the project's value was at the lower end of the RM700 million to RM800 million range, which WCT guided earlier.

Tan said this could mean the bidding process was more competitive than expected.

Following news of the project, Tan had maintained Public Investment's "outperform" call for WCT shares with an unchanged target price of RM2.60.

"WCT‟s outstanding order book is estimated to exceed RM3.5 billion with the new job, ensuring earnings visibility for the next 1-2 years.

"We still like WCT for its strategic shift towards a more sustainable business model of growing recurring income, and we also like the group's conservative capital management with relatively low gearing, which would enable it to weather cyclical lows and also capitalise on investment opportunities," Tan said.