KUALA LUMPUR (July 7): WCT Holdings Bhd (KL:WCT) is expanding its foreign reach with the latest job win in the Middle East, analysts said, though investors barely reacted to the news.
A successful delivery of the subcontract worth 836 million dirham (RM926 million) could enhance WCT’s prospects of securing repeat work from project owner Aldar Properties, the largest listed real estate developer in Abu Dhabi, Hong Leong Investment Bank said.
“We view WCT’s re-entry into the Middle East as a strategic move,” the house said.
On Monday, WCT announced that its 50:50 joint venture with Construction General Contracting House Ltd has secured the job for the construction of six residential buildings in Abu Dhabi. WCT’s effective share of the contract amounts to about RM463 million.
The latest award builds on a smaller contract from Aldar worth RM529 million with the same partner announced on June 18, which marked its re-entry into the Middle East market. Before that, WCT’s last project was the Lusail development in Qatar, handed over in 2021.
WCT’s return to the Middle East also comes as the company had missed the wave of data centre contracts sweeping across Malaysia and amid a slowdown in local infrastructure project tenders.
“While we acknowledge the higher risk of overseas projects, we are comforted this is not a new market for WCT and its local partner has been in the construction industry for more than 30 years,” CGS International noted.
Public Investment Bank estimates that the new job will expand WCT’s outstanding construction order book by 21% to RM2.2 billion while contributing about 14% annually to WCT’s earnings over the 40-month contract period.
At the time of writing, shares of WCT were unchanged on Tuesday at 42.5 sen, giving the company a market capitalisation of RM663 million. The stock has lost about 26% of its value since the year began.