Friday, September 23, 2011

CIMB Research retains Outperform on WCT

KUALA LUMPUR: CIMB Equities Research said the 25 years plus 10 years concession agreement between WCT BHD [] and MAHB for the KLIA2 integrated complex was a big milestone for WCT.

It said on Friday, Sept 23 this was WCT's first concession in Malaysia and would give it both CONSTRUCTION [] and recurring income.

'A positive surprise is the estimated RM100 million to RM200 million upside to the RM530.3 million construction cost,' it said.

CIMB Research said it made no changes to its FY11-13 EPS forecasts or RM4.44 RNAV, which already factored in WCT's 70% share of the integrated complex's NPV(13% WACC).

'We retain our OUTPERFORM call and RM3.99 target price, which is pegged to an unchanged 10% RNAV discount. This announcement and other project awards including a potential sizeable contract from the Middle East could catalyse the stock. The group's end-11 target of RM2 billion new contracts remains intact,' it said.

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