Wednesday, December 15, 2010

CIMB Research maintains Outperform on WCT, TP RM4.21

KUALA LUMPUR: CIMB Equities Research said WCT's deal to develop a RM688 million commercial project in Medini was a positive surprise.

It said on Wednesday, Dec 15 this marks another milestone for WCT as it is its third venture in Medini and raises its profile as one of the leading developers and contractors in Iskandar.

'This project raises WCT's outstanding GDV to RM4.6bn, which will last 7-8 years. Though the project will only start filtering through to earnings from FY12, it reinforces our positive stance on the group's outlook.

'We make no changes to our EPS forecasts, OUTPERFORM call or RM4.21 target price, which is pegged to an unchanged 10% discount to RNAV. Potential re-rating catalysts include (i) this announcement, and (ii) other contract wins. WCT remains one of our top picks for the CONSTRUCTION [] sector,' CIMB Research said.

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