Malaysia gains from supply chain shifts; Sunway to benefit: HLIB
KUALA LUMPUR: Malaysia continues to benefit from global supply chain diversification, which is driving sustained demand for industrial space amid rising geopolitical tensions, according to HLIB Research.
In line with this, HLIB said Sunway Bhd's enlarged land bank in Rawang, Selangor, is well positioned to strengthen the group's economies of scale and deliver stronger returns.
The research house noted that Sunway's recent acquisition of a 40.3-hectare parcel has increased its total land holding in Rawang to 139.6 hectares, with a combined gross development value (GDV) of RM2.7 billion.
According to HLIB, the larger land bank will allow Sunway to spread common infrastructure and marketing costs across a bigger GDV, driving greater operational efficiency and improving overall return on investment.
"While Sunway has prior experience with smaller-scale industrial projects in Subang and Dengkil, this represents its first full-fledged large-scale industrial park.
HLIB Research added that the move allows Sunway to diversify its portfolio, reducing reliance on the residential segment and providing a more balanced, resilient revenue stream.
Sunway purchased the freehold land in Kuang for RM65.1 million, with an indicative GDV of RM700 million.
It will be acquired through Sunway Rawang City Bhd, a joint venture between Sunway (70 per cent) and Amal Resources (30 per cent).
The transaction is expected to be completed by the fourth quarter of 2025.
The land will be developed into an industrial tech park, with the first launch targeted in the first quarter of 2028, following the construction of a LATAR Expressway interchange.
HLIB Research said the acquisition price implies a land cost-to-GDV ratio of 9.3 per cent.
It noted that the land comprises about 26.8 hectares zoned for industrial use, 9.7 hectares zoned for agricultural use and 3.8 hectares designated for electrical pylons.
"The group is expected to incur additional costs to convert the agricultural portion for industrial use, which is projected to raise the adjusted land cost-to-GDV ratio to slightly above 10 per cent, which is still within the typical 10–20 per cent range for industrial land in the Klang Valley," HLIB Research added.
The firm kept its "Buy" call with an unchanged target price of RM5.90 a share.
"With the group's widening exposure in the Malaysian economy, the stock provides a good proxy to the domestic economy, which is currently entering a new phase of growth," it added.
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