MIDF maintains 'neutral' call on WCT’s stock

This is despite the property developer receiving
Vietnamese government's approval to undertake a residential and
commercial development in Ho Chi Minh City.



MIDF Research has maintained “neutral” call on WCT Bhd, despite the
property developer receiving approval from the Vietnamese government to
undertake a residential and commercial development in the capital city.

Two days ago, WCT told the stock exchange that its unit WCT (S) Pte
Ltd was awarded an Investment Certificate to develop a 4.6ha plot at
Saigon South in Ho Chi Minh City.

The 70:30 joint venture
between WCT and the Vietnamese government’s Southern Land Corp will see
WCT setting aside an initial charter capital of US$25.2 million (RM79.88
million).

MIDF said it is sceptical on the execution as back
in 2008, WCT was awarded a contract to build Platinum Plaza, the largest
shopping mall in Ho Chi Minh City. Yet, up until now, that project is
still not contributing to WCT’s income.





“The property market in Vietnam is unstable as the country is still
facing high borrowing costs and inflation,” the research house said in
its notes to investors.

MIDF estimates that WCT’s share price
might settle at RM2.20 from the current RM2.32. It derived the RM2.20
target price by ascribing a price to earnings ratio of 9.6 times.