PETALING JAYA: SD Guthrie Bhd
is expected to strengthen its earnings prospects and financial position as it accelerates the monetisation of its plantation landbank and expands its industrial development business, with analysts expecting its latest RM933.57mil land disposal to unlock further value and reduce borrowings.
Apex Securities said it viewed the group’s latest land sale consideration positively, as it was in line with SD Guthrie’s strategy of diversifying beyond plantation earnings via the industrial development segment while also strengthening its balance sheet.
“On a pro forma basis, our financial year 2027 (FY27) base earnings per share would rise from 45.59 sen to 47.79 sen, although this includes the one-off disposal gain and should not be treated as recurring earnings run rate.
“With RM744.4mil to pay down credit facilities, we estimate FY27 net finance costs to reduce 8.65% to RM169mil. Forecast FY27 gearing ratio stands at 15.6% versus 18.8% previously,” the research house said in a report recently.
Apex Securities said beyond the immediate financial benefits, SD Guthrie will retain exposure to the development through a 30% stake in Bukit Kerayong Industrial Developments Sdn Bhd (BKID).
It noted the joint venture (JV) planned to transform the land into an integrated light-to-medium industrial development with supporting commercial hubs.
“This offers SD Guthrie potential participation in future development profits without having to undertake the entire project independently.
“Nevertheless, the announcement does not provide a development timeline, project gross development value (GDV), expected development margins or projected earnings contribution.
“We, therefore, do not ascribe additional value to the JV at this stage,” the research house said.
Last week, SD Guthrie through its wholly owned subsidiary, SD Guthrie Land Ventures Sdn Bhd (SDGLV), entered into a shareholders’ agreement with Bukit Kerayong Industrial Venture Sdn Bhd (BKIV), a wholly owned subsidiary of YTL Power International Bhd (YTL Power), Bumi Assets Sdn Bhd (BASB), and BKID.
The agreement establishes BKID as the JV vehicle responsible for acquiring approximately 657.09 ha of land from SD Guthrie and undertaking the subsequent industrial development.
SDGLV, BASB, and BKIV hold 30%, 35%, and 35% interest in BKID respectively. BKID’s issued share capital will increase from RM100 to RM10mil, with SDGLV contributing RM3mil for its 30% equity interest.
Apex Securities has a “buy” call on SD Guthrie with a higher target price of RM7.71, from RM7.60 based on a price-to-earnings ratio of 19.8 times on FY27 earnings per share.
Meanwhile, CIMB Securities said it estimates SD Guthrie’s industrial development net profit could reach RM960mil in FY27, supported by the latest Bukit Kerayong disposal and the previously announced Kulai land sale.
This exceeds the research house’s current FY27 forecast of RM600mil in industrial development profit by RM360mil, implying potential 12% upside to group FY27 net profit.
CIMB Securities maintained its “buy” call and sum-of-parts based target price of RM6.52, pending a review of its earnings forecasts following SD Guthrie’s upcoming third-quarter of 2026 results.
