MIDF Research expected the volume of cargoes to improve in tandem with the recovery in crude palm oil (CPO) production and stable throughput from the oil and gas segment.
KUCHING (June 30): Analysts are sanguine on the prospects of Suria Capital Holdings Bhd (Suria) on a longer-term horizon as they believe that Sabah could draw more investments into the state due to its economic potential and the expansion and development plans that are underway would strategically position the group to capitalise on this.
In the near-term, the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) expected the volume of cargoes to improve in tandem with the recovery in crude palm oil (CPO) production and stable throughput from the oil and gas segment.
“Based on our in-house projections, exports and imports are expected to grow by 16.9 per cent and 19.2 per cent respectively in the current year 2022 (CY22),” MIDF Research said.
“However, there is a lack of near-term catalysts for Suria as most of its expansion and development projects have long gestational periods and are not expected to make meaningful contributions to its earnings in the near future.
“On a longer-term horizon, we are sanguine on the prospects of the group as we believe that Sabah could draw more investments into the state due to its economic potential and the expansion and development plans that are underway would strategically position Suria to capitalise on this.”
Meanwhile, MIDF Research recalled that the ferry terminal operations were badly hit since the onset of the pandemic hence the contract & engineering and ferry terminal operations segment has not been doing well in the past two years.
“Nonetheless, SCHB Engineering Services Sdn Bhd (SCHB Engineering) had previously offered rental discounts of between 20 per cent to 70 per cent to the tenants and tour operators at Jesselton Point to help ease their burden.”
In tandem with the reopening of Malaysia’s border since early April, the research arm expected this segment to fare better in the coming quarters with the return of tourists which will boost the activities at the Jesselton Point Ferry Terminal.
“Nonetheless, the contribution from this segment remains minimal relative to Suria’s total revenue.”