MBSB Research maintains the neutral outlook on SD Guthrie Bhd at this juncture as they believe that positives have been priced in.
SDG, Eco World, and NS Corporation have completed the acquisition of about 1,195 acres of freehold land in PD, Negeri Sembilan through their JV, Eco Business Park 7 Sdn Bhd (EBP7) from SDG.
Notably, EBP7 will be led by Eco World with a 55% stake, followed by SDG Land Ventures Sdn Bhd 30%, and NS Corp of 15%.
Recall back, the collaboration was first formalised through an MoU on 18 December 2024, followed by a Shareholders’ Agreement on 20 May 2025, which became effective upon completion of the land purchase.
The SPA, signed on 18 April 2025, was completed for a total cash consideration of RM572.76 mil, translating to about RM11 psf.
While this reflects a 56% discount to Gamuda’s recent land disposal at RM25 psf, we view the valuation is fair given SDG gained 30% stake in the JV, which allows participation in the industrial land development and provides a platform for future earnings accretion to its recurring income base.
We estimate SDG could recognise a net disposal gain of at least RM378 mil after assuming a 10% disposal-related costs and 24% tax.
The proceeds may enhance shareholder value, either through potential special dividends payout or via reinvestment into new brownfield estates, as we mentioned in our N9 Thematic Report.
We view EBP7 Sdn Bhd is on track to develop an integrated industrial park within Parcel C of MVV 2.0, with an estimated gross development value of RM2.95 bil.
Managed by Eco World Project Management, the project is strategically positioned with planned access to the Nilai-Labu Expressway, connecting to KLIA, Port Klang, Nilai and the PLUS Highway.
We view its prime location and strong connectivity enhance its appeal to industrial and commercial tenants to seek business expansion outside the Klang valley area. —Sept 26, 2025
Main image: The Malaysian Reserve
