KUALA LUMPUR: WCT Holdings Bhd shares rose as much as 4.91% yesterday after it announced that it had clinched a 1.22 billion riyals (RM1.2 billion) contract for the Lusail development project in Doha, Qatar under a joint venture (JV) there.

The stock climbed on the news and touched an intraday high of RM1.71 before settling down 2.45% to close at RM1.59 per share. Its market capitalisation stood at RM1.71 billion.

In a filing with Bursa Malaysia yesterday, WCT (fundamental: 0.6; valuation: 1.8) said its wholly-owned subsidiary, WCT Bhd has in a JV with Al-Ali Projects Co (WLL) on March 8, 2015, accepted a contract from Lusail Real Estate Development Co WLL for works on the Lusail development project.

WCT has a 70% stake in the JV, while Al-Ali Projects holds the remaining 30%.

WCT said the work scope includes construction of a commercial boulevard, light rail transit stations and underground car parks for Lusail. 

“The contract is expected to contribute positively to the group’s future earnings and net assets.

“The award of the contract is not subject to the approval of shareholders of the company or any governmental or statutory authorities,” WCT added.

Following yesterday’s announcement, HLIB Research has raised its financial year 2015 (FY15) to FY16 earnings estimates for WCT by 9% to 10% and upgraded the stock to “hold”.

“While the contract improves earnings visibility, we are not entirely excited as it merely makes up for pedestal job wins in the past,” the research firm said.

The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations. Go to www.theedgemarkets.com for more details on a company’s financial dashboard.

This article first appeared in The Edge Financial Daily, on March 10, 2015.