KUALA LUMPUR (July 16): Shares in WCT Holdings Bhd (KL:WCT) surged on Tuesday to their highest in more than six years, after the company announced that it had secured a construction contract worth RM214 million.
WCT rose as much as 11 sen or nearly 10% to RM1.22, its highest since March 2018. The stock closed at RM1.16, valuing the company at RM1.65 billion on Bursa Malaysia. Trading volume totalled 61.69 million shares for the day.
The latest contract, which comes less than a month after the last win, indicates healthy job flows for the company after getting zero new contracts in the past two years, analysts said.
“We are encouraged that WCT is once again winning jobs,” CGS International said in a note to clients. WCT has secured RM461 million worth of new jobs year-to-date, putting the company on track to meet its own target of RM2 billion order wins for the year, the house noted.
Shares in WCT have racked up 132% gain so far this year, tracking strong gains in the construction sector fuelled by optimism about the government's roll-out of major infrastructure projects. WCT’s plan to spin off some of its assets into a real estate investment trust has also boosted its share price.
The consensus, however, is divided over prospects of further gains in WCT’s share price. TA Securities upgraded the stock to ‘buy’ on Tuesday, while Kenanga Investment Bank downgraded its rating to ‘underperform’.
Following the changes, there are now four ‘buy’ calls, four ‘hold’, and one ‘sell’ rating out of nine analysts covering the stock, with a 12-month target price of RM1.13, according to Bloomberg.
WCT is set for a better year ending Dec 31, 2024, thanks to various public infrastructure projects, such as the Penang International Airport expansion project, but the share price has “run ahead of its fundamentals”, Kenanga said in downgrading the stock.
On Monday, the company announced that it had secured another contract worth RM214 million from Kwasa Land Sdn Bhd to undertake construction works at the Kwasa Damansara township development in Sungai Buloh.
WCT bagged a similar project worth RM127.39 million from Kwasa Land in September 2015 under work package contract 1A, which has been completed, according to its website.
The job scope for the latest contract includes site clearance, demolition works, earthworks, geotechnical works, roadworks, bridge structure, vehicular underpass structure, drainage works, water reticulation, sewerage works, mechanical and electrical works, river improvement and routine maintenance works.