KUALA LUMPUR (Nov 14): CIMB Research has cut its target price for WCT BHD [] to RM3.30 from RM3.99, and said investors should look beyond 2011, which may be a letdown in terms of project awards.
“We are cutting EPS for lower order book assumptions.
“Our target price falls because 1) we roll it forward and apply our revised target market P/E of 12.6x (14.5x P/E) to CY13 CONSTRUCTION [] earnings, and 2) double our RNAV discount to 20% for subdued project award prospects,” the research house said in note Nov 14.
CIMB Research said WCT’s project flows for 2012 were backed by the RM4 billion worth of jobs that the company had tendered for.
“This underpins our OUTPERFORM rating,” it said.
“We are cutting EPS for lower order book assumptions.
“Our target price falls because 1) we roll it forward and apply our revised target market P/E of 12.6x (14.5x P/E) to CY13 CONSTRUCTION [] earnings, and 2) double our RNAV discount to 20% for subdued project award prospects,” the research house said in note Nov 14.
CIMB Research said WCT’s project flows for 2012 were backed by the RM4 billion worth of jobs that the company had tendered for.
“This underpins our OUTPERFORM rating,” it said.
