| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A major Malaysian developer has successfully secured a significant property development project in Singapore, a move that is expected to substantially bolster its future property pipeline. The company, as part of a joint venture, emerged as the top bidder for a prominent mixed-use development, signaling its renewed focus and expansion in the lucrative Singaporean market.
Project Details and Strategic Rationale
The developer, acting in a consortium with partners Evia and H108, was identified as the highest bidder for a 317,000 square feet land parcel in Chencharu, Singapore. The tender price for this acquisition stands at approximately RM3.3 billion (SG$1 billion). The upcoming project is envisioned as a mixed development with a maximum gross floor area (GFA) of 1 million square feet, carrying an estimated gross development value (GDV) of RM6 billion. The Malaysian developer is poised to take a leading role, holding a 50% stake in the joint venture.
This new acquisition is strategically vital, marking the developer’s re-entry into the Singapore property market following the successful sell-out of its OLA executive condominium in 2023. The project’s appeal is further enhanced by its strategic location adjacent to Khatib MRT station and proximity to various schools, with 78% of the land designated for a private condominium featuring 875 units. Project launches are projected for the second half of financial year 2026 (2HCY26), and the development is anticipated to contribute an estimated RM300 million in pre-tax profit (PBT) between CY26-30. The developer’s effective RM1.6 billion stake is expected to be fully funded by debt, ensuring minimal impact on the group’s net gearing.
Analyst’s Outlook and Risks
PhillipCapital analysts reiterated their BUY rating for the developer, maintaining an unchanged SOP-derived target price of RM6.64. The firm expressed continued positive sentiment, highlighting the developer’s strong track record in executing infrastructure projects and its increasing exposure to data centre initiatives. This land bank replenishment supports their existing earnings forecasts.
However, PhillipCapital also outlined several key risks that could affect their positive outlook. These include potential delays in project execution, slower-than-expected contract wins, a softening in property sales, and the possibility of cost overruns on projects. Despite these challenges, the strategic new project win is seen as a robust addition to its future earnings and development pipeline.
