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Monday, July 20, 2009

WCT rises to nine-month high

WCT Bhd, Malaysia’s fourth-biggest builder, rose to a nine-month high in Kuala Lumpur trading after the company won four infrastructure-related contracts from Medini Iskandar Malaysia Sdn. valued at RM766.5 million (US$215 million).

The stock gained 4.5 per cent to RM2.58 at 11.38am, set for the highest level since Sept 30, outpacing the benchmark FTSE Bursa Malaysia KLCI Index’s 1.1 per cent gain.

The contracts will boost WCT’s outstanding order-book by 35 per cent to RM2.9 billion and contribute about RM23 million in pretax profit a year over the next two years, CIMB Investment Bank Bhd said in a report today.

The contracts “adds weight to our view that WCT is one of the key beneficiaries of pump-priming,” CIMB said. The stock is “one of our top picks for the construction sector.”
WCT’s jobs are in the Iskandar Development Region, an investment zone in Johor. Malaysia’s government rolled out the Iskandar development in November 2006 with the hope of attracting RM382 billion of investment into the area in two decades.

Maybank Investment Bank Bhd raised its target price on WCT to RM2.65 from RM2.20, while OSK Research Sdn Bhd upgraded the stock to “buy” from “trading buy” and lifted its target estimate to RM2.90 from RM2.47 ringgit

By Bloomberg

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