08-07-2025
WCT's order book forecast to grow this year
PETALING JAYA: WCT Holdings Bhd looks set for a more promising earnings trajectory through this year, as analysts turned increasingly positive following the property and construction group's RM365.2mil contract win last week to widen a section of the North-South Expressway in Johor.
CGS International Research (CGSI Research) highlighted the significance of the award, describing it as its first win for this year and a potential turning point for the group's order book momentum.
'We reiterate 'add' for its compelling valuation of just 0.3 times 2025 price-to-book value, less than mean levels since 2015, and improving construction and property franchises,' the research house said.
However, it lowered its target price to RM1.28 to reflect a smaller order book and enlarged share base after a placement exercise.
MIDF Research also struck an upbeat tone, maintaining its 'buy' recommendation for WCT with a target price of 95 sen.
'This award further strengthens WCT's reputation as a seasoned player in highway and civil infrastructure projects and positions the group well to tap into upcoming public-sector packages including the Penang International Airport expansion and future highway corridor upgrades,' the research house said, noting the contract accounted for over one-third of WCT's job replenishment target of RM1bil this year.
The 36-month project, awarded by Projek Lebuhraya Usahasama Bhd, covers site clearance, roadworks, bridge construction, and utility relocation work from Sedenak to Simpang Renggam, with work commencing towards the end of this month.
With the contract win, WCT's construction order book is expected to rise by 14.6% to RM2.8bil.
Kenanga Research welcomed the award as WCT's first major contract win this year, building on a RM249.7mil contract secured last year for the same highway stretch.
The research house maintained its 'outperform' call for WCT, with a target price of RM1.25, citing the group's exposure to the impending rollout of various public infrastructure projects such as the Penang International Airport expansion project, Pan Borneo Highway, Subang Airport regeneration plan, and various government hospitals.
Public Investment Bank Research said it expects the project to contribute about 2% to 4% annually to the group's earnings over the 36-month contract period' and noted that WCT's unbilled order book had grown 14.6% to RM2.8bil.
It kept its 'outperform' rating and RM1.08 target price unchanged, adding the award fell within its order book replenishment assumptions.
Beyond job wins, CGSI Research pointed to balance-sheet improvement as another rerating catalyst for WCT, following the listing of Paradigm-REIT and reduction in perpetual sukuk.
'We expect its balance sheet to improve to a net gearing of 0.5 times this year from 0.8 times at end-2024. This leaner balance sheet to be reflected when it releases its second-quarter (2Q25) results in August and serves as a rerating catalyst,' it said.
MIDF Research noted that despite a seasonally soft 1Q25, the outlook remained encouraging.
'We have kept our earnings forecasts unchanged, in line with our expectations of stronger job flows ahead. This has been reinforced by the group's recent RM365.2mil contract win, which will progressively support earnings from 2026,' it stated.
While WCT's earlier job replenishment pace had been sluggish, CGSI Research highlighted that it was now broadening tenders and aiming for projects including the Penang LRT, airport expansion, and Middle East civil infrastructure.
