/// East Malaysia Property News
Jesselton Quay Project a Strong Catalyst for Suria
Capital
SP Setia Group to Enhance
KK’s Status
in passenger fees income
resulting from higher number
of tourist arrivals in Sabah.
The research firm explained
that among the three
segments, it is optimistic on its
logistics and bunkering division
which is the second biggest
revenue contributor to the
group.
Alliance Research added
Suria Capital’s logistics and
bunkering segment has been
recording two consecutive
quarters of breakeven results.
The roll out of Suria Capital
Holdings Bhd (Suria Capital)
Jesselton Quay property
development in Kota Kinabalu,
Sabah will provide a strong
re-rating catalyst to the
company’s earnings.
Analysts believe the company’s
new revenue stream could
be derived from property
development as most of the
company’s line of businesses
have been providing stable
income to the company.
RHB Research Institute Sdn
Bhd (RHB Research) in a
report said, “The Jesselton
Quay project remains the key
catalysts in the near future.
“The ex-container port land is
ripe for property development
and Jesselton Quay will drive
Kota Kinabalu and Suria Capital
to new highs,” the research
firm said.
Additionally, Alliance Research
Sdn Bhd (Alliance Research)
in a report said “We expect
the impending launch of its
Jeseltion Quay project to be a
strong catalyst,” the research
firm noted.
The research firm observed
that the project is currently
awaiting procurement of
development order and is
expected to be launched in the
second quarter of 2014.
To recap, Suria Capital had on
October 2013 entered into a
joint venture agreement with
32
another listed company, SBC
Corporation Bhd to develop
the Jesselton Quay project.
The project comprised of
commercial suites, retail mall,
retail units, office towers and a
hotel will carry a net sale value
of RM1.8 billion.
The Jesseltion Quay project
to be built on a 16.25 acre of
prime port land is strategically
located at the waterfront of
Kota Kinabalu city centre.
Meanwhile, the port operator’s
net profit for the fourth
quarter of 2013 (4Q13) rose 65
per cent year-on-year (y-o-y) to
RM15.61 million.
As for financial year 2013
(FY13), the company in a filing
to Bursa Malaysia on February
28 said its earnings grew 22
per cent y-o-y to RM61.84
million.
For 2013, the company’s
turnover gained 0.3 per cent
y-o-y to RM263 million while
revenue for 4Q13 increased 16
per cent to RM73 million.
Alliance Research noted the
higher revenue received for
4Q13 was driven by port
revenue growth of 25.2
per cent y-o-y, continuous
turnaround of logistic and
bunkering division which grew
178 per cent y-o-y and strong
revenue growth of 66 per
cent y-o-y from ferry terminal
division due to increase
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The research firm believed that
Suria Capital’s logistics and
bunkering division will provide
more contribution supported
by the partnership that the
company has formed with
Singaporean Petro Summit Pte
Ltd in November last year.
Alliance Research observed
that for Suria Capital’s port
operations, there was a five
per cent drop in revenue in
total tonnage handled in 4Q13
mainly attributable to lower
palm oil related exports while
container throughput grew by
five per cent y-o-y.
The research firm also noted
Suria Capital’s profit before
tax expanded at a stronger
rate of 18.7 per cent driven by
improved efficiencies at port
operations and turnaround
of logistics and bunkering
services.
Hence, with the strong results,
Alliance Res earch forecasted
Suria Capital’s core earnings
to grow by 5.5 per cent, 4.1
per cent and one per cent
for FY14, FY15 and FY16
respectively.
The research firm noted that
the declining earnings growth
for Suria Capital could be
due to higher depreciation
charge following heavy capital
expenditure cycle in FY14
and FY15 as well as higher
effective tax rate as the
company special tax incentive
is expected to end in 2016.
Kota Kinabalu is experiencing dynamic growth
in its economy, tourism and real estate market.
And SP Setia Bhd Group who recently held their
Chinese New Year celebration at their sales
gallery in KK Times Square is set for 2014. The
Group will enhance its status with the 60-acre
Aeropod, the city’s first integrated transport hub
development.
Strategically located directly opposite Terminal
One of the Kota Kinabalu International Airport
(KKIA), Aeropod will be the new home of the
existing Tanjung Aru railway station, which is
part of the 134km Tenom-Tanjung Aru line
formerly known as the North Borneo Railway
and is the only operational rail transport system
in Sabah. SP Setia will modernize and redevelop
the train station, which covers about 18 acres,
and as he city’s new transport hub, Aeropod will
be similar to KL Sentral is some ways.
Business development senior manager Alex
Loh said, “We hold a long-term goal everywhere
we go and we will be cautiously looking at the
opportunities open to us because the real
estate sector will be challenging this year.
But we are excited that the number of tourist
arrivals is very significant,” he said adding
that Sabah’s growth is coming from multiple
dimensions, including the robust oil and gas
sector.
According to project planning and development
senior manager Timothy Lim, “The first phase is
to do the train station while the second phase
is the commercial part of it. Very soon you
will see the superstructure coming up and we
hope to finish off within two years according to
schedule. We will also be constructing a flyover
at our own cost which starts from KKIA all the
way to Kepayan.”
Launched in February 2012, Aeropod will take10
years to construct and upon completion will
include two hotels, 1,500 to 2,000 residential
units and 140,00 sq ft of retail space. The urban
pad will also include retail offices, corporate
offices, a shopping mall with food and beverage,
and entertainment outlets, plus SOVO units.
Construction of boutique retail offices are
currently in progress and due for completion in
2015.