WCEHB price rising up too fast this few months toward the actual progress of the completion of the expressway. The section 7 of the expressway, which presently only completed 59% shall only be completely finish ETA on End of 2024, which is 1.5 year from now.
As WCE also have disposal of it's 40% stake holding of Rimbayu Development on Dec-2022. This disposal means WCE will not have any other revenue and profit earning, beside their pending construction work of on WCE Expressway work.
Frankly, even with the fully run of the expressway, first few years it may still face losses due to high payment of capital + interest. However, it is very good stock as expressway in middle to long term; 1. it have 50 years of concession tenure. 2. it cover the busiest path from Klang Valley to Taiping, which serve majority of the highway users. 3. From the distance run, it is 233km (WCE) vs 275km (PLUS) from Klang to Taiping, and bypass the hilly road around Ipoh, it shall attract more users than PLUS, once it is fully run.
Nevertheless, it will only be fully run, earliest on 2025, due to Section 7 path is the last puzzle to be completed. As the Section 7 is in between Selangor path and Perak path, this missing link will discourage most users to take this path from Klang Valley to Taiping.
Newly opened sections will start to contribute towards WCE financials, don't have to wait for the full completion This means section 1, 2, 6 and 11 will be able to get a head start to generate revenue by early 2024, even if at sub-optimal level
I think section 11 completion plays a significant pull factor as well, it would mean you can already link up north Selangor to Taiping already, starting from Tanjung Karang in Selangor which is not far away from Kuala Selangor. I would give a guess some travellers as far away as Puncak Alam may be willing to travel trunk roads just to reach WCE Tanjung Karang tol if they were travelling to Taiping/Penang, especially during weekends or peaks.
For WCE to get full toll fee, the section 7, which link between Kapar - Tg karang is the critical path, as travelers from Banting, Klang are willing to tap on it to have smooth drive to Taiping and joint PLUS to Penang onward.
If this link is missing, travel via trunk roads to reach Tg Karang will stop 50% of travelers, which will cut revenue by half.
The present paths opened by early 2024 will only offered two separate short distance (100km) each expressway to serve Selangor and Perak independently. With this model, anticipate the car flow could only receive half or even lesser.
Therefore, Section 7 completion is most important path, not just add on piece on the main dish.
Refer Qr-3, 2023, Dec-2013; The toll revenue is only RM11.6 million, annualize is of RM45.0 million, aa compare to finance cost of RM150.0 million, there is RM100mil gap to fill.
The above findings have significantly suggest the criticalness of pushing the progress of Section 7 path, even with extra work hours and extra machineries to finish the work ahead of time. If all could study the award to WCE construction (via it's announcement of receive work order by July 2021), the completion of Section 7 is by end of 2024. That makes the full access of this WCE is 1.5 years from now.
Beside the uncontrolled issues such as land acquisition etc, which was not been disclosed to public for clarity; the late commencement of Section 7 (about one year behind other 10 sections) is significantly impact on the full collection of revenue from this CWE.
I believe top management of WCE of even their major stake holder IJM would be also feel very upset about this "poor or worst" planning on the project critical path.
For WCE Section7 path: Refer to WCE project update announced every month. March-2022, 48% June-2022, 51% Sept 2022, 53% Dec-2022, 55% March 2023, 59%
From the update, every month progress is about 1%, with 41% work balance to go, this give direct assumption of 41 months to go, to complete by end 2026. Oh my God. This progress will be very much behind the planned completion.
Summary of the TheEdge Cover Story on WCE this week. 1. Lyndon (CEO) tells The Edge that the highway will be fully completed by end-2024. 2. Traffic volume in the current four sections - averaging 50,000 to 60,000 vehicles daily. 3. In this 2023 year, WCE is targeting to open another four sections - 3 in Selangor (sections 1, 2 and 6) and the final stretch for the Perak portion (Section 11). 4. Hit a new peak of 100,000 average daily vehicles during Hari Raya. 5. Working on ancillary revenue from development along the expressway, including petrol stations and rest stops.
However, CEO declines to comment on when WCE will break even.
just notice it has been up 6 straight days. Appearing on the cover of a magazine -- does it mean it is a very good time for the big fund to sell tomorrow?
I am a bit disappointed to know that the completion date is late 2024, and not early 2024 as mentioned before
Share price strong movement may be indication of coming good results. Also in anticipation of the sections to be opened this year. Anyone have indication of when they will be opened this year? Then we can expect or even "time" the further jump of share price.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Husky78
38 posts
Posted by Husky78 > 2023-05-05 16:36 | Report Abuse
RM 1600