Thursday, October 21, 2010

More to come for WCT, says MIDF

MIDF Research has maintained its buy recommendation on WCT BHD [] at RM3.11 and raised its target price for the stock to RM4.24, pegged at sectoral'' average of 14.5 times FY11 earnings versus previous valuation of RM3.87.

The research house said WCT's order book ballooned to RM4.4 billion and was still growing after the company landed a RM1.36 billion project in Doha and another RM127 million hospital project in Tuaran, Sabah.

MIDF Research said it was revising its forecast for WCT to take into account the income from the CONSTRUCTION [] of the new contracts, adding it was looking at a possibly higher replenishment target for 2011, as it expects more new domestic-based jobs to awarded in the near future.

"As outlined in the 2011 Budget and the ETP, potential awards include packaged for (i) Klang Valley LRT extension, (ii) Langat 2 water treatment plant, (iii) various highway projects.

"We are of the opinion that more news flow on potential awards could intensify in the next 12 months," it said in a note on Thursday, Oct 21.


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