Company Name: WCT BHD
|Research House: OSK||Price Call: BUY||Target Price: 3.05|
Three research houses -- OSK Research Sdn Bhd, AmResearch Sdn Bhd and Hong Leong Investment Bank research division (HLIB
Research) -- have recommended a 'buy' call on WCT Bhd.
OSK Research said it remained positive on WCT's long-term earnings given its sturdy outstanding orderbook of over RM2.5 billion as well as potential jobs flow for the remainder of the year.
"We expect the group to secure more contracts by year-end, with potential infrastructure jobs in Oman and the United Arab Emirates," it said in a note today.
The opening of KLIA2, scheduled in April 2013, may prove to be re-rating catalyst, it said.
OSK Research maintained its 'buy' call with the fair value reduced to RM3.06 from RM3.10 previously.
AmResearch said WCT's construction earnings before interest and taxes fell 19 per cent year-on-year in first half of financial year 2012 following a void left for some key Middle East jobs that were completed last year.
"But, sequential earnings momentum should pick up in the coming quarters as the impact of recently-secured local jobs begin to filter through.
AmResearch has maintained its 'buy' call with an unchanged fair value of RM3.05.
Meanwhile, HLIB Research said the positive factors for the 'buy' call were major contract wins, growing property investment income and strategic land banking exercise. It has maintained the target price at RM3.36. -- Bernama