WCT (9679): New Expressway Contract Fuels Optimism, Target Price RM1.08
Summary (TL;DR):
- Research Firm: PUBLIC Investment Bank
- Subject: WCT / WCT (9679)
- Core Rating: Outperform
- Target Price / Top Picks: RM1.08
- One-Liner: WCT Holdings Bhd has secured a significant RM365.2 million contract for the North-South Expressway expansion, bolstering its construction order book.
Report at a Glance
PUBLIC Investment Bank released its latest research report on WCT on July 07, 2025, maintaining a “Outperform“ rating with a target price of RM1.08. The core thesis of the report is that WCT’s recent RM365.2 million contract win for the Sedenak-Simpang Renggam section of the North-South Expressway (PLUS) expansion project is a positive development, contributing significantly to its FY25 job replenishment target.
Investment Thesis (The Bull Case)
- Point 1: WCT has secured a substantial RM365.2 million contract from Projek Lebuhraya Usahasama Bhd for the construction of additional lanes on the Sedenak-Simpang Renggam section of the North-South Expressway.
- Point 2: This marks WCT’s first contract win of the year, contributing 36.5% towards its FY25 job replenishment target of RM1.0 billion.
- Point 3 / Key Beneficiaries: With this new job, WCT’s outstanding construction order book is estimated to increase by 14.6% to RM2.8 billion, providing strong earnings visibility for the Group.
Potential Risks (The Bear Case)
- Risk 1: No specific major risks were explicitly detailed in this report.
- Risk 2: No specific major risks were explicitly detailed in this report.
- Risk 3: No specific major risks were explicitly detailed in this report.
Financial Forecast Summary
The analyst’s financial projections for the coming years are as follows:
| Fiscal Year (YE to Dec) | FY25F | FY26F | FY27F |
|---|---|---|---|
| Revenue (RM mil) | 1,602.0 | 1,662.2 | 1,745.3 |
| Net Profit (RM mil) | 92.8 | 115.3 | 159.3 |
| EPS (sen) | 6.0 | 7.4 | 10.2 |
| DPS (sen) | — | — | — |
| Dividend Yield (%) | — | — | — |
| P/E Ratio (x) | 13.4 | 10.5 | 10.5 |
(Source: PUBLIC Investment Bank research report)
Valuation & Target Price
| Rating | Outperform |
| Last Close Price | RM0.67 |
| Target Price (TP) | RM1.08 |
| Valuation Methodology | The target price is pegged at 0.4x Price-to-Book Value (PBV), which is +2 standard deviations above its mean. |
Analyst’s Conclusion
- Overall Stance: The analyst maintains an “Outperform” rating on WCT, viewing the recent contract win as a positive development, although it falls within existing FY25 orderbook replenishment assumptions.
- Key Catalyst/Strength: The securing of the RM365.2 million expressway expansion contract significantly boosts WCT’s order book, enhancing earnings visibility for the coming years.
- Major Headwind/Risk: The report does not explicitly highlight any specific major headwinds or risks for WCT.
- What to Watch: Investors should closely monitor the progress and execution of the Sedenak-Simpang Renggam expressway project and WCT’s ability to secure further contract replenishments to meet future targets.
Disclaimer: This article is a summary and interpretation of a research report published by PUBLIC Investment Bank on July 07, 2025. All information is for reference purposes only and does not constitute investment advice. Investors should conduct their own independent research and due diligence and assume all associated risks.
