“`html
SIMEPROP: Mega Industrial Park Development Bolsters Future Growth Prospects
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
Analysts at RHB have reaffirmed a “BUY” rating on a property developer, maintaining a target price of MYR2.33. This sustained positive outlook, which signals a substantial 79% upside alongside an estimated 3% yield, is primarily driven by the developer’s strategic joint venture (JV) to establish a new mega industrial and logistics hub in the Guthrie Corridor.
Key Development Details
The JV, formed with SD Guthrie (SDG MK), involves developing a 3,000-acre land in Kuala Selangor. This location is deemed highly strategic due to its close proximity to key logistics infrastructure, including Port Klang, Bandar Bukit Raja, the West Coast Expressway, and the future East Coast Rail Link. The initial phase will focus on 1,000 acres within SDG’s existing estates at Jalan Acob, Bukit Kerayong, and Bukit Cherakah, with a potential estimated Gross Development Value (GDV) of MYR4-5 billion. The land acquisition is expected to be transacted at MYR9-12 per square foot, with payments likely to be staggered, depending on conversion and title issuance.
Development for this significant project is anticipated to commence in 2028-2029, following the completion of land preparation. Management noted that the land profile for this Kuala Selangor land is similar to existing developments, suggesting more manageable initial spending on land enhancement and infrastructure compared to other projects.
Future Growth Drivers
Looking ahead, the developer is actively cementing its position in the industrial development sector post-pandemic. Over the near term, three new industrial projects – Vision Business Park at Malaysia Vision Valley 2.0 (MVV 2.0), Bandar Bukit Raja Business Park/BBR 4, and Elmina North/Lagong – are slated to drive property sales from 2026 onwards. Furthermore, analysts foresee the potential for additional JVs with major landowners like SDG, given the developer’s previously indicated intention to acquire more land in strategic areas such as Iskandar Malaysia and MVV 2.0.
While maintaining earnings forecasts and the target price, the research report underscores the long-term growth potential stemming from these strategic industrial developments, reinforcing the continued “BUY” recommendation.
“`
