Wednesday, December 28, 2011

Affin Research maintains Buy on WCT, RM3.56 target price

KUALA LUMPUR (Dec 28): Affin Equities Research is maintaining its Buy call on WCT BHD [] at RM2.30 with a price target of RM3.56.

WCT had announced on Tuesday its unit was awarded an investment certificate to undertake a residential and commercial mixed development on a 46,577 sq m (11.5 acre) site in Ho Chi Minh City, Vietnam.

Affin Research said on Wednesday since the land area was only 11.5 acres, it did not believe the project would take 50 years to develop.

'We continue to believe in the long term potential of the property development business in Vietnam but with the eurozone debt crisis still unfolding and global economy expected to slow in 2012, short-term uncertainties remain,' it said.

The research house said that on the upside, there was recent good response to Gamuda's Celadon City (Ho Chi Minh City) and Gamuda City (Hanoi) projects.

'Pending guidance on project launch date and gross development value, we maintain our FY11-13 forecasts, target price (at 15 times CY12 EPS) and BUY call for WCT.

'Recent tender failures and likely inability to secure RM2 billion of new projects this year are key concern,' Affin Research pointed out.

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