KUALA LUMPUR (Nov 11): Shares in WCT Holdings Bhd extended gains today and hit a two-year high at RM1.96 in the mid-morning trades, following a series of positive news flows. 

At 11 a.m., shares in the construction outfit cum property developer gained four sen or 2.09% to trade at RM1.95, after touching a high of RM1.96 earlier. 

Trading volume stood at 8.4 million, as compared to its 65 day average volume of 3.17 million shares.

At RM1.96, it has a market capitalisation of RM2.41 billion, and is trading at 12.46 times of its price to earnings ratio (PER).

The current share price represents 16 sen or 8.9% premium to the analysts' consensus target price of RM1.80, according to Bloomberg data. 

According to Mass Rapid Transit Corp Sdn Bhd's (MRT Corp) press release on Wednesday, it had awarded two new MRT 2 packages worth RM1.6 billion in total awarded to two contractors. WCT was awarded the larger package with the contract value of RM896.41 million. 

The award came after the group saw the emergence of Tan Sri Desmond Lim Siew Choon as its single largest shareholder early this month. He also owns substantial stakes in Malton Bhd and Pavilion Real Estate Investment Trust (REIT).

Lim, who is the chairman of Pavilion REIT, had on Nov 1 acquired the 19.67% stake or 245.72 million shares from WCT co-founders Peter Taing Kim Hwa and Wong Sewe Wing. It is estimated Lim had paid RM614.3 million to the duo, based on a transacted price of RM2.50 apiece, which represented a 75 sen or 42.8% premium to the closing price of RM1.75 on that day.

In a note to clients yesterday, CIMB Research raised its target price on WCT Holdings to RM2.16, from RM1.88 previously, as it rolls its valuation on the counter to end of next year. The stock ratings, however, remained unchanged at Add.

The research outfit is positive on the MRT job winning, saying the new job could potentially bump up WCT's outstanding RM4.3 billion order book by 21% to RM5.2 billion.

"Including the earlier awarded Pan Borneo Sarawak contract, total wins year-to-date (y-t-d) amount to RM1.4 billion, based on joint venture share, (fall) within our assumption of RM1.5 billion for financial year 2016 (FY16).

"Based on a 5% pretax margin, package V204 should contribute RM11 million per annum over four years," it added. — theedgemarkets.com

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