AmResearch maintains Buy on WCT

KUALA LUMPUR: AmResearch has maintained its Buy call on WCT BHD with an unchanged fair value of RM3.85 after the company’s wholly-owned subsidiary WCT CONSTRUCTION Sdn Bhd secured an earthwork contract with Vale Malaysia Manufacturing Sdn Bhd.

In a note Friday, July 29, AmResearch said that this was the first major contract that WCT has secured this year.

The award is for Phase 1A (Stage 1) of Vale’s iron ore distribution centre and pelletisation plant project in Teluk Rubiah, Perak.

The total contract value is estimated at RM115mil – and is to be completed in April 2013. Scope of works includes earthwork, drainage, roads & pavement, slope protection works as well as temporary sedimentation ponds at Vale’s.

“We have maintained our earnings forecast for FY11F – as this new job forms part of our new orderbook assumptions of RM2 billion.

“Most importantly, we believe WCT’s early success would provide the impetus for the group to be in a competitive position to secure more jobs for Vale’s massive project,” it said.