| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A prominent Malaysian property developer has announced a significant strategic expansion of its industrial portfolio with the acquisition of a large land parcel in Johor. This move, representing the company’s sixth land deal in 2025, is anticipated to substantially bolster its long-term earnings potential and solidify its presence in a key economic growth region.
Strategic Expansion in Johor
The developer has entered into a 60:40 joint venture with KLK Land to acquire 419.15 acres of freehold industrial land in Kulai, Johor, for a total consideration of RM274 million. This site is strategically positioned within the burgeoning Johor-Singapore Special Economic Zone (JS-SEZ), an area actively attracting manufacturing, logistics, and technology investments due to its proximity to Singapore and robust regional connectivity.
The acquired land, at an implied cost of approximately RM15 per square foot, is considered attractive and favourable compared to similar transactions in the vicinity. Its location benefits from excellent access to Senai International Airport, Pelabuhan Tanjung Pelepas (PTP) and Johor Port, Sultan Abu Bakar CIQ, and major highways, facilitating efficient cross-border trade and logistics.
Development Plans and Future Outlook
The newly acquired land is slated for the development of “MS Industrial Park @ Kulai,” envisioned as a large-scale integrated industrial park with an estimated Gross Development Value (GDV) of RM2.26 billion. The project aims to cater to high-value industrial sectors, including advanced manufacturing, logistics, warehouses, and data centres. Management indicates that the development will proceed in phases over an estimated 8-10 year period, with initial launches expected following the completion of the land acquisition in the second half of 2026.
This acquisition significantly expands the company’s total landbank to 2,761 acres, now boasting a remaining GDV of RM31.1 billion. The group maintains a strong balance sheet, characterized by net gearing of 0.25x and substantial cash holdings of RM1.17 billion as of end-September, providing ample financial flexibility to pursue further value-accretive opportunities while sustaining growth momentum.
Analyst’s View and Recommendation
TA SECURITIES views this acquisition positively, highlighting its role in reinforcing the developer’s industrial strategy and disciplined capital allocation. The project’s strategic JS-SEZ positioning, attractive entry cost, scale, and phased development profile are seen as key drivers supporting long-term earnings potential.
The investment bank has maintained its FY25-FY27 earnings forecasts, pending the completion of the deal, and reiterated its “BUY” recommendation. The target price remains unchanged at RM1.72 per share, based on a CY26 P/Bk multiple of 1.0x and incorporating a 3% ESG premium, reflecting a constructive outlook underpinned by solid fundamentals, a prudent landbanking strategy, and consistent sales execution.
