Moody's affirms Sime Darby's ratings at A3, outlook revised to negative. - AFP file pic
KUALA LUMPUR:Sime Darby Bhd
is poised to be the biggest beneficiary of the proposed new port development in Carey Island, Selangor where the plantation-based conglomerate is the largest landowner.
Maybank IB Research said the new port - the third port development in the Klang Valley - will hasten the unlocking of land value at Carey Island over the next 20-30 years.
“Sime is the largest landowner on Carey Island with over 11,000 hectare. The land is planted with oil palm trees, has a few mills, a biodiesel plant and a R&D centre.
“Sime has owned this land for a few decades now. Its book value is low, estimated at less than MYR1 per square foot (psf),” the research firm said in a report yesterday.
It added that the accessibility of Carey Island has also improved in recent years with the completion of the South Klang Valley Expressway, while the completion of West Coast Expressway (targeted by 2019) will further improve its accessibility.
“Recall that Westport’s development started in the 1990s and over the past 20 years boosted property development projects south of Klang,” the research firm noted.
On Monday, The Star reported that the next massive port-industrial city project to be built in Klang Valley will be at Carey Island.
The area earmarked covers over 100 sq km (ie >10,000ha) with infrastructure investments of more than RM200bil.
The giant new port will also be able to handle more cargo than the two existing ports in Klang Valley combined, according to the report.
This 20-year project will comprise the development of an integrated port and related infrastructure, industrial parks and free trade zones, commercial and residential buildings.
According to Maybank IB Research, Northport and Westport will likely max out their capacities in 5 years.
“We are long-term positive over this development and maintain a HOLD with unchanged target price of RM8.20 on 21x FY18 price to earnings ratio, its historical 5-year mean.”
At 4.07pm, shares of Sime were down eight sen down to RM8.47.
