CIMB Research maintains Trading Buy on WCT, lowers target price to RM2.55

CIMB Research maintains Trading Buy on WCT, lowers target price to RM2.55
Business & Markets 2013
Written by theedgemalaysia.com
Tuesday, 09 April 2013 08:10


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KUALA LUMPUR (April 9): CIMB Research has maintained its Trading Buy rating on WCT at RM2.45 with a lower target price of RM2.55 (from RM2.58) and said the cancellation of WCT's Oman highway job was a negative surprise.

In a note Tuesday, the research house said it was disappointed as the RM1 billion-project was the largest secured in 2012.

Major works have not started, suggesting minimal claims, it said.

CIMB Research said the impact on EPS and RNAV was minimal but the order book declines 22%.

The research house trimmed its FY13-15 EPS to reflect the cancellation, and lowered its target price, still based on a 40% RNAV discount.

“Despite the bad news, we stay Trading Buy as we expect sector catalysts to improve over the medium term.

“We believe WCT will bag several domestic jobs this year, which will compensate for the negatives on the overseas front. WCT remains one of our top picks, backed by its RM3 billion tender book,” it said.