PETALING JAYA, 7 JULY 2025 - MIDF Amanah Investment Bank Bhd (MIDF Research) has maintained its BUY recommendation on WCT Holdings Bhd with an unchanged target price of RM0.95, implying a potential total return of 41.8% from its current price of RM0.67. The research house is basing its valuation on forecast FY26 earnings per share of 5.6 sen, pegged to a price-to-earnings ratio of 17 times, in line with WCT’s two-year historical mean.
The reaffirmed call comes after WCT secured an RM365.2 million contract from Projek Lebuhraya Usahasama Bhd (PLUS) for the North-South Expressway additional lane project. The award will cover works on the Sedenak to Simpang Renggam stretch, with construction scheduled to begin on 28 July 2025 and completion targeted by mid-2028. MIDF Research noted that the contract win aligns with its earlier assumption of RM1 billion in job replenishment for the year and should contribute progressively to earnings starting FY26.
Despite 1QFY25 results falling short of expectations due to seasonally slower construction activity, the house has kept its earnings forecasts unchanged, anticipating stronger billings in the latter part of the year. The PLUS contract lifts WCT’s outstanding order book to an estimated RM2.9 billion, offering greater visibility into near-to-medium-term earnings and reaffirming its positioning within Malaysia’s civil infrastructure upcycle.
MIDF Research believes WCT is well-placed to benefit from upcoming public-sector contracts, particularly in expressways, airport expansion and utility infrastructure, citing its experience and existing tender book of over RM13 billion. The group is expected to secure further jobs in the second half of 2025, driven by increased government emphasis on transport and public infrastructure upgrades, including data centres and road projects.
MIDF Research believes WCT is well-placed to benefit from upcoming public-sector contracts, particularly in expressways, airport expansion and utility infrastructure, citing its experience and existing tender book of over RM13 billion. The group is expected to secure further jobs in the second half of 2025, driven by increased government emphasis on transport and public infrastructure upgrades, including data centres and road projects.
On the tax front, MIDF Research believes the 6% Sales and Services Tax (SST), which came into effect on July 1, 2025, will have minimal impact on project margins. The contract sum already includes SST and exemptions on key materials like steel and cement, further mitigating cost pressures. The house also highlighted that large infrastructure projects typically have tax pass-through clauses, which WCT is adept at managing.
With its operations primarily focused on Malaysia, the investment bank considers WCT to have limited exposure to geopolitical and trade-related risks. This domestic concentration offers a strategic advantage amid ongoing global uncertainties, particularly in contrast to more export-reliant construction players.
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