PETALING JAYA: Sarawak’s engineering, procurement, construction and commissioning (EPCC) players are expected to be the main beneficiaries of the state’s growth ambitions, which include a proposed deep‑sea port and an airport near Kuching that could total RM100bil.
Kenanga Research, which recently spent three days in Sarawak, identified the EPCC‑driven companies Pansar Bhd
, Ibraco Bhd and Insights Analytics Bhd as likely beneficiaries, as well as Cahya Mata Sarawak Bhd, the state’s sole cement producer.
It said these EPCC firms would likely enter joint ventures with other major EPCC or Chinese EPCC players, while Cahya Mata would benefit from higher cement demand, as proximity to the projects matters for logistics costs.
The deep‑sea port would serve as Petroleum Sarawak Bhd’s (Petros) gas terminal, with plans to become a major maritime gateway for the southern part of the state while anchoring the Kuching low‑carbon gas hub and supporting carbon capture and storage infrastructure.
Kenanga Research added that the growth plans, which involve heavy demand for energy, would likely see a restructuring of Sarawak Energy Bhd, the state’s utility operator, in which the regulated infrastructure would be separated from the power generation assets involving hydropower.
The power generation assets would be a strong candidate for a listing, given their cashflow base and long‑term growth potential due to the renewable energy element, the export option to Singapore and the ability to attract investors with environmental, social and governance mandates.
“Packaged as a pure‑play renewable independent power producer (IPP) with a 15GW growth roadmap could be its valuation trump card versus peers,” Kenanga Research said, adding that the company targets 15GW by 2035 (from six GW currently) and has issued a request for the proposal for five more dams.
Sarawak Energy was privatised in 2009, and its last traded market capitalisation was RM3.9bil, implying a historical price‑to‑earnings (PE) ratio of 20 times.
In comparison, pure IPP Malakoff Corp Bhd trades at a PE of 23 times for the financial year ending Dec 31, 2026, while regional IPP Sembcorp Industries trades at 12 times.
“If successful, the initial public offering will turn the company into a strong proxy for investors seeking exposure to Sarawak’s economic growth in the coming decade, as energy underpins all the roadmaps to be undertaken by the state government,” Kenanga Research pointed out.
For water infrastructure, the research house said Pansar and Insights Analytics could benefit due to their ability to execute water‑related EPCC jobs and systems, while in pipe replacement, KKB Engineering Bhd and Ibraco remained the best proxies.
Sarawak has committed to spending RM20bil under its water master plan, of which RM7bil has already been spent.
It noted that the state’s long‑term development goals hinge on Petros possessing gas‑aggregation rights, as sufficient gas supply would be needed to attract foreign investment in high‑value industries, while the deep‑sea port would depend on gas‑related projects.
Currently, Petroliam Nasional Bhd (PETRONAS) exports most of the gas as liquefied natural gas.
The Petros-PETRONAS legal case over gas‑distribution rights, federal-state oversight of economic assets and revenue has gone to the Federal Court, Malaysia’s highest court.
While no deadline has been fixed, the case is expected to reset the entire framework of federal-state resource rights while also defining the Petros-PETRONAS relationship.
