WCT

WCT (HOLD çè)

Waiting for Fresh Catalyst

§     Weak 4Q… Results were mainly dragged down by RM40m provision in the construction division, while the property division suffered due to labour shortages.

§     Lost some… WCT lost out in the tenders for Putrajaya Parcel F and Qatar Al Rayyan road projects, while the Sabah teaching hospital has been shelved by the Government.

§     Being prudent… For FY14, job prospects are WCE packages, Kwasaland civil works, KL Sentral Linkway and Putrajaya Parcel Z commercial buildings. As for overseas projects, WCT will remain focused in Qatar given the potential developments for World Cup 2022.

§     Awaiting AP… Achieved new property sales of RM37m in 4Q, bringing FY13 new sales to RM499m, 64% of RM775m FY13 sales target. The missed target was mainly due to issues in obtaining AP permit whereby RM200m bookings are pending to be formally converted into sales. For FY14 , new property sales target is RM1.2bn.

§     Earnings visibility… Overall, construction external order book is still healthy at RM2.1bn, translating to 1.8x FY13’s construction revenue while unbilled property sales stood at RM575m, translating to 1.3x FY13’s property revenue.

§     Although WCT’s fundamentals remain intact, we are maintaining our HOLD call with a reduced TP of RM2.26 on WCT due to the lack of upside catalysts.