FNB analysts said construction group Wilson Bayly Holmes-Ovcon (WBHO) is set to gain from more renewable energy and infrastructure projects in South Africa.
Peet Serfontein and Mmamosa Khanye gave this view in a trading note for the bank’s equity research team, Daily Investor reported. They said the company’s share price is trading at an attractive value.
WBHO and Raubex are the last two large diversified construction companies listed on the JSE. This leaves them well placed if spending on infrastructure grows.
The government plans to spend R1 trillion on infrastructure over the next three years. It hopes to draw in trillions of rand more from private investors.
According to the analysts, WBHO can work on commercial, industrial and infrastructure projects. These include data centres, renewable energy, mining and transport.
The company works mainly project by project. Its results depend on winning contracts, keeping costs in check and finishing work on time. WBHO built Mall of Africa and the Discovery head office in Sandton.
WBHO also has operations in the rest of Africa and in the United Kingdom. These two markets bring in 31.8% of its earnings, while South Africa brings in the rest.
In 2026 the group bought Zamori 172, a business that manages and installs solar projects. The deal adds to WBHO’s own ability to build renewable energy projects.
Serfontein and Khanye expect investment in renewable energy to grow as Eskom gets involved through Eskom Green. Private companies are also competing with the power utility. The analysts said the state is moving its spending away from consumption and towards investment.
Together with building work in the rest of Africa, this is expected to grow the company’s order book, the analysts said.
WBHO has kept its doors open while many rivals shut down. It has grown revenue and profit by taking work that collapsed competitors left behind, Daily Investor reported.
Meryl Pick of Old Mutual Investment Group called this a “survivorship factor” in an update late last year. She said investors now have to take it into account when they buy South African shares.
“The company has a record order book, not because there are record levels of infrastructure spend or economic growth, but because all the other construction companies have folded,” Pick said.
“So, at a company-specific level, they have just cleaned up market share and have seen tremendous growth on the back of it,” she said.
Pick gave retailer Shoprite as another example. She said Shoprite is well run but has also gained from mistakes made by rivals Pick n Pay and SPAR.
“You cannot do a broad brush stroke in a specific sector or across the economy, because there is no rising tide to lift all boats,” Pick said.
Source: this article is based on reporting by Daily Investor. Image: Daily Investor. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.