BOT for a new LCCT for up to 25 years concession
• KLIA2… WCT has received a RM486m job for the construction of the new Low Cost Carrier Terminal, dubbed the KLIA2, from MAHB. Subsequently, both WCT and MAHV will jointly undertake the 25 years concession via a SPV under a 70:30 sharing basis respectively.
• The job. The integrated KLIA2 complex comprises
(i) a transportation hub for taxis and buses,
(ii) one building block with a lettable area of about 437,000 sq ft (Landside Mall) and
(iii) 6,000 bays car park. The construction of the complex is expected to be completed by 30 June 2012.
• RM2.9b outstanding order book and growing. The group continued to aggressively bidding for new jobs, both overseas and domestic in order to replenish its existing orderbook of RM3.2b. Apart from KLIA2, other big project secured this year is the RM221m Bahrain City Centre Hotels Fit Out Works in February. Besides that, WCT is also bidding other jobs in Iskandar Malaysia, Johor and a major water infrastructure work in Sabah. We believe that WCT would remain its 50:50 split between local jobs and the Middle East contracts.
• FY11 earnings projection revised upwards. We revise our earnings forecast for WCT to take into account income from the construction of this new complex but we have not imputed any numbers relating to the concession until more detail is made available.
• Maintain BUY with a higher target price of RM3.87/share pegged at 15x FY11 earnings versus previous valuation of RM3.30 at 14.5x FY10 EPS
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