Suria Capital’s port throughput in the near term will likely receive an additional boost from the recent FDIs by China’s Kibing Group and South Korea’s SK Nexilis, analysts observed.
KUCHING: Port operators in Malaysia are generally expected to remain resilient in 2023, with major port operators such as Suria Capital Holdings Bhd (Suria Capital) set to benefit from the inflow of foreign direct investments (FDIs), analysts say.
In its 2023 market report outlook, the research team at MIDF Amanah Investment Bank Bhd (MIDF Research) Suria Capital’s port throughput in the near term will likely receive an additional boost from the recent FDIs by China’s Kibing Group and South Korea’s SK Nexilis due to the ongoing construction of their manufacturing plants in Kota Kinabalu Industrial Park (KKIP).
“In addition, there were a few measures mentioned as part of Pakatan Harapan’s manifestos in which Suria Capital stands to benefit from. The measures include upgrading of Sapangar Bay Container Port (in which the expansion is ongoing), gazetting free trade zones in KKIP, Lahad Datu POIC and Sipitang Oil & Gas Industrial Park (SOGIP) and solving basic infrastructure problems in all industrial parks in Sabah.
“Although beneficial for the port operator, we view this as more of a medium to longer term catalyst for them,” MIDF Research opined.
Meanwhile, on the performance of Westports Holdings Bhd (Westports), the research team said it remains cautious on moderating consumer demand in 2023 against a backdrop of high inflation and rising interest rates, which could deter exporters from bulking up its volumes.
“Additionally, we are wary that the ongoing geopolitical tensions in Europe and China’s strict zero-Covid policy could still be a dampener for global economic activities next year.
“Westports as well as most port operators in the Peninsular are mainly in the transshipment business, hence its performance is very much dependent on the external trade.
“Westports’ management is guiding for a low single digit growth in container throughput next year which we have translated into a four per cent y-o-y projection – largely due to the low base in 2022 (expecting a full-year decline of four per cent y-o-y).
“Nonetheless, we expect its earnings to rebound in 2023 on the back of higher port throughput and the absence of Cukai Makmur. The recent change in government is not expected to have an impact on their Westports 2 expansion plan as it is under the purview of the civil service. The management is aiming for the signing to take place in mid-2023,” it explained.