In the long term, its investment property portfolio will look promising, with over rm2.5 billion in assets by mid 2016. However near term earnings momentum is weak mainly due to the lack of contract wins in the past two years…
From 2015 onwards, we will see a potential turnaround in earnings growth mainly driven by growth in investment property income. By 2016, expects 30% to 35% of the group’s earnings to come from recurring incomes.
WCT has the upper hand in both the earthworks package as TRX and the infra jobs at Pengerang.
It is targeting for a tender win for its infra jobs in Qatar.
Its undeveloped land bank stands at about 1426 acres worth about rm25 billion in GDV.
The Paradigm Mall in Johor Bahru is constructing and expected to be operational by the third quarter of 2016. Its 70% owned Paradigm Mall in Kelana Jaya is about 98% tenanted.
It is operating a concession of the gateway@klia2 shopping mall for a period of 25 + 10 years. The mall is expected to break even in 2015.
The company has about rm2.4 billion in planned launches for 2014.
Although the company is packed with property investment value, it is believed that the value will be more appreciated only once the company begins to show stronger earnings growth that is expected to come in 2015/2016.
The REIT exercise would enable WCT to unlock values on its matured retail malls and its Gateway@KLIA2 mall concession.
WCT intends to REIT its three existing malls, which have an estimated total asset value of RM2bil, in 2015.
Proceeds from the REIT would ease WCT’s financing of its new shopping malls. Also, shareholders could benefit via a distribution of shares in the REIT.
WCT is tendering for RM4bil worth of jobs and its orderbook would be supported by internal construction works.
The property developer is also re-strategising its future property launches to suit current market demand.
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