RHB sees long-term growth potential in Carey Island development
KUALA LUMPUR: RHB Investment Bank Bhd has maintained its "Buy" recommendation on Sime Darby Property Bhd, citing strong prospects from the group's upcoming industrial development at Carey Island in Selangor.
The research house sees Carey Island as a promising economic growth corridor, driven by its close proximity to port infrastructure and the final ECRL terminal at Port Klang, positioning the area as a key logistics and industrial hub.
"The government also has plans for a new port at Carey Island in the future. The joint venture will further strengthen Sime Darby Property's presence on the west side of the Klang Valley, as it has already established a strong foothold in Bandar Bukit Raja, Subang Jaya, and Elmina," RHB said in a note.
Last Friday, Sime Darby Property and SD Guthrie Bhd signed a joint venture agreement to develop up to 809 hectares of land in Carey Island. The project is still at the planning stage, and no details were provided on land price, gross development value or effective stake.
"However, although SD Guthrie may hold a majority stake in the joint venture as it is the landowner, we think Sime Darby Property may play a major role in the development, given the latter's experience and track record in industrial development," RHB said.
RHB believes Carey Island holds strong long-term growth prospects, supported by Sime Darby Group's proven track record in developing key economic corridors such as the Guthrie Corridor, Subang Jaya, and Malaysia Vision Valley 2.0.
"Carey Island may be a new growth corridor in the next 10 to 15 years. It has been identified by the government as the new site for a world-class port due to its strategic location near Port Klang and proximity to Pulau Indah," it said.
The research firm also noted that the East Coast Rail Link (ECRL), currently under construction, will terminate at Port Klang, with planned extensions to Westport and Northport, further enhancing the area's connectivity.
Additionally, Sime Darby Property currently operates two estates and palm oil mills on Carey Island, which RHB said could serve as a foundation for its upcoming industrial development.
In the future, the joint industrial development should mainly cater to supporting the import/export industries that are highly dependent on the port facilities, it said.
"We make no changes to our forecasts and valuations for now, as the development may only start in four to five years, since infrastructure and land-clearing works will need to be completed first.
"Overall, we are positive on this strategic tie-up, as it marks a new milestone in collaborating with SD Guthrie. Sime Darby Property may be able to tap into more development opportunities with SD Guthrie over the longer term, given the latter's huge land resources," RHB said.
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