WCT: No impact from Vietnam in two years

SHAH ALAM: WCT Engineering Bhd does not see its Vietnam operations having any impact on the group at least for the next two years, said chairman Datuk Ahmad Sufian.

It had not budgeted any revenue or cost contribution from the project in the next two years, he said after the company AGM yesterday.

“We have not signed to buy land from any third party, which would have been a risk (with the current turmoil),” executive director Loh Siew Choh said.

Instead, the company would be acquiring land through the government for its Platinum Plaza project there, he said.

While it was negatively affected by high fuel prices, “Vietnam is still a predominantly agricultural economy and with rising food prices the farmers are actually benefiting,” he said.

Building works on Platinum Plaza would begin with the shopping centre in 2010.

WCT has a 67% stake in a maiden joint venture to develop 9ha in Binh Chanh District at the new southern area of Ho Chi Minh City.

Analysts estimate the project, which include retail and entertainment outlets, having a gross development value of US$700mil.

Components of the project include a basement car park with three-storey elevated area, a retail and entertainment centre, and two high-end 22-storey office towers. Total gross floor area is estimated to be 671,960 sq m.

However, Loh said WCT would adjust the construction and investment outlay depending on where the demand was seen headed, possibly reducing the number of floors for the shopping centre.

The project was expected to take three years to build and the shopping mall would be completed by 2013 or 2014, he said adding: “At that time hopefully the downcycle would be over.”
WCT's order book stands at RM5.2bil, of which 70% were overseas projects mainly in the Middle East, said Sufian.

The Dubai racecourse and the Formula 1 track in Abu Dhabi were on track while the shopping centre in Bahrain was near completion, he said.

Deputy managing director Goh Chin Liong said WCT was seeking more projects in the Middle East and exploring North Africa.

“We see that North Africa could be a new growth centre and are now exploring the region.” he said.

Picture:Guangzhou fashion girl

Aseambankers bullish on WCT

Aseambankers favours WCT for its sizeable RM5.2 billion order book, backed by good project management and further exposure to the Middle East


RESEARCH firm Aseambankers Malaysia Bhd has maintained a "buy" call on WCT Engineering Bhd and estimates that the construction and property development group's share price can go up to RM4.15.

In a research note to investors yesterday, Aseambankers head of research Vincent Khoo said his target price is based on 11 times of WCT's share price to forecast earnings for next year.

WCT has so far completed the bulk of work at the Kota Kinabalu International Airport and the UiTM Campus, leaving a few building jobs in Putrajaya exposed to rising steel and cement prices.

However, WCT is expected to be able to claim for higher costs from the government.

"In the Middle East, however, rising building material costs are not a major concern as most of the materials have been procured," Khoo said.

"We favour WCT for its sizeable RM5.2 billion order book, backed by good project management and further exposure to the Middle East," he added.

Khoo believes that WCT is eyeing major infrastructure jobs in Bahrain, Dubai, Abu Dhabi and Qatar on a selective basis.

While WCT's order book should still sustain growth until next year, he anticipates that WCT is capable of securing up to RM1 billion worth of new jobs in the second half of this year.

"Over the near term, WCT's construction activities should offset the slowdown in property, which has seen revenue decline in this year's first quarter results following weaker buyer sentiment," he said.

Khoo also expects WCT's property project in Vietnam to start contributing to the group's bottom line in 2010.



From Business Times Online 20 May 2008