PETALING JAYA: Analysts are optimistic about the long-term outlook of Suria Capital Holdings Bhd’s port operations in Sabah, given the state’s role as a key palm oil and crude oil producer.
AmInvestment Bank said the relocation of manufacturing bases by multinational companies out of China to South-East Asia will also benefit Sapangar Bay Container Port (SBCP) in Sabah.
“Suria embarked on the business of Sabah port operations after the privatisation of the state’s ports from Sabah Ports Authority in 2004.
“Presently, Suria operates all eight main seaports in the state, with SBCP as the flagship port and main revenue generator,” the research house said in a report yesterday.
AmInvestment Bank noted that Suria is in the midst of expanding SBCP.
“Upon completion, SBCP’s port handling capacity will increase to 1.25 million 20-foot equivalent units (TEUs) per year, allowing Suria to further capitalise on the strategic location of SBCP.
“Suria intends to develop SBCP to become the region’s transhipment hub.”
As the company monopolises port operations in Sabah, AmInvestment Bank said Suria will be affected by the external trade of the state.
“Sabah’s key export is palm oil (26% of the country’s palm oil export) and crude oil (30% of the country’s crude oil export).
“In 2021, Suria handled 5.5 million tonnes of containers (or 397,000 TEUs) and 24.7 million tonnes of conventional cargoes (64% comprised palm oil and crude oil products).”
As a port operator in Sabah, AmInvestment Bank said Suria’s financial performance depends on the economic activities of the state.
“Countries contributing to Sabah’s external trade include China, Australia, India, the Netherlands, the Philippines and Japan. China is the largest trading partner, accounting for 22.7% of Sabah’s external trade in 2021.”
The research house said Australia was the second largest, making up another 9.3% of Sabah’s external trade in 2021.
“China and Australia import mainly palm and petroleum products from Sabah. The two products accounted for 67% of Sabah’s export revenue in 2021.”
AmInvestment Bank said the upcoming development of the Sapangar Bay Conventional Cargo Terminal may see the terminal taking over the conventional cargo operations from Kota Kinabalu Port.
It said Kota Kinabalu Port is currently being transformed into a leisure destination, operating a cruise terminal.
“On the east side of Sabah, Sandakan and Tawau Ports are the state’s second and third busiest multipurpose ports, handling both containerised and conventional cargoes.
“The ports are the main export hubs for the palm oil industry in Sabah. Lahad Datu is expected to be the central hub for the imports of bulk fertiliser in Sabah.”