PETALING JAYA: Aquawalk Group Bhd
may lift its long-term earnings contribution by RM2.6mil after taking full ownership of the developer of a new oceanarium in Kota Kinabalu, Sabah.
Aquawalk had signed a 30-year lease agreement with Jesselton Docklands 1 Sdn Bhd for 73,054 sq ft of premises at The Bedrock, for the development and operation of the oceanarium, to be named Aquaria KK.
Aquaria KK had initially been planned as a 60:40 joint venture (JV) with Qhazanah Sabah, but it would proceed on a wholly owned basis to streamline execution and retain full operational control.
Additionally, the project completion timeline has been pushed back to the financial year ending Dec 31, 2029 (FY29) from FY28 previously.
In a note, Apex Research said the shift to full ownership would enable the group to consolidate 100% of earnings.
“Based on our estimates, this translates to RM6.6mil in profit after tax upon completion in FY29, compared with the estimated RM4mil under the previous JV structure,” it said.
The research house noted that Aquaria KK marked the group’s first venture into Sabah and a significant milestone in its regional expansion strategy, positioning it to capitalise on the state’s strong growth in tourism.
However, it said without Qhazanah as a JV partner, the group would bear a higher capital commitment and full exposure to execution risk, as it would have to fully fund the RM70.5mil project.
Apex Research said RM39.6mil of the project would be funded via proceeds from Aquawalk’s initial public offering last year, with the balance to be sourced from internally generated funds or borrowings.
“Given Aquawalk’s strong net cash position of RM180.9mil, we do not view funding as a constraint,” it said.
The research house also noted that the group’s full ownership of Aquaria KK meant that it could not leverage the local institutional backing Qhazanah offers, particularly in navigating regulatory processes such as planning approvals, regulatory compliance and operating licences as well as coordinating with state and local authorities.
“As a Sabah state-linked entity, Qhazanah could also enhance the project’s positioning as a key tourist attraction, supporting visitorship growth and ticket sales,” it added.
It said the group has a proven track record in developing and operating similar assets including the Aquaria KLCC and Aquaria Phuket, and the project would utilise its existing business model and in-house expertise.
“Our projections assume an initial visitorship of about 360,000 per annum with gradual ramp-up over time, while maximum capacity is expected to be similar to Aquaria KLCC at 2.9 million visitors annually,” Apex Research said.
While positive on the 30-year lease and shift to full ownership, it has revised its earnings estimates for FY28 to factor in the new completion timeline.
