Deeper Dive: 20th May 25
Today’s lens captures a contract supercycle forming in Johor, a full-stack AI bet unfolding in Cyberjaya, and fresh energy optionality across Sarawak. Below, we dissect the most investable corporate and policy pivots shaping Malaysia’s May market narrative.
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🔑 Key Stories with Investment Potential
JS-SEZ – Johor’s RM100b Economic Engine Ignites
UEM Sunrise (KL:UEMS), Sunway (KL:SUNWAY), AME Elite (KL:AME), Gamuda (KL:GAMUDA), MMC (KL:MMCCORP)
Final blueprint due by end-2025. Target: 100 projects, RM100b FDI, 100k high-value jobs. 6 local + foreign banks already signed LOIs.
Investment Rationale:
Federal-State-Singapore alignment + fiscal perks = real policy firepower. Infrastructure tailwind + logistics ramp-up = multi-sector upside.
Ideas to Explore/Consider:
☑ Accumulate Johor-centric names (landbanks in Kulai–Pengerang corridor).
☑ Construction names with Johor track record (Gamuda, IJM, Kimlun).
☑ MMC for logistics/port rerating on cross-border trade theme.
KAB – Energy Leap with RM646m Labuan Plant
Kinergy Advancement (KL:KAB), PetGas (KL:PETGAS)
EPCC contract win for 120MW gas plant via Sinohydro JV. Work starts May 20. RPSB (JV of PetGas + Sabah utilities) as awarder.
Investment Rationale:
Re-rates KAB as credible utility-scale player. Builds recurring income story around sustainable infra.
Ideas to Explore/Consider:
☑ For growth seekers: accumulate KAB on contract momentum.
☑ For steady cashflow: PetGas holds exposure to same JV via RPSB stake.
Petronas–Petros Deal – LNG Value Chain Clarifies
PetGas (KL:PETGAS), MISC (KL:MISC)
Petros likely to be sole aggregator; margin est. ~10%. Export upside retained by Petronas.
Investment Rationale:
Creates long-term clarity over Sarawak gas rights. Infrastructure monetisation + dividend stability baked in.
Ideas to Explore/Consider:
☑ Hold/accumulate PetGas for yield (~4.5%) and infrastructure rerating.
☑ Monitor Petros IPO signals – future listing candidate once cash flows stabilise.
☑ MISC gains from increased LNG shipping throughput.
Sarawak IPO Pipeline – SEDC Assets on Deck
Contractor proxy: Gamuda (KL:GAMUDA), HSS Engineers (KL:HSSEB)
Kenanga flags Sarawak Metro, SEDC Energy (hydrogen/renewables), and hospitality assets as IPO candidates once self-sufficient.
Investment Rationale:
State pivoting from grants to market funding. IPOs = monetisation + transparency.
Ideas to Explore/Consider:
☑ Watchlist pre-IPO names; position in ART/Kuching rail-linked contractors.
☑ Treat award announcements in 2H25 as speculative trading pops.
Affin Bank – CASA Surge Powers Turnaround
Affin Bank (KL:AFFIN)
1Q net profit +12.6% YoY. CASA ratio climbs to 32.2% vs 24.9% last year. Strategic pivot: Islamic + green finance, digitalisation.
Investment Rationale:
Below-book valuation, improving funding mix = M&A or rerating candidate. NIM stabilisation + FX gains de-risk 2025.
Ideas to Explore/Consider:
☑ Accumulate on weakness; yield ~4%, CASA-led funding advantage.
☑ Monitor for M&A chatter – potential consolidation target in medium term.
Paradigm REIT – Retail Stability with 7.16% Yield
Paradigm REIT IPO
Portfolio includes Klang, PJ, and Johor malls. 99%+ occupancy. IPO now open, yield guided at 7.16% (RM1.00 retail price).
Investment Rationale:
Retail resilience + Visit Malaysia 2026 + JS-SEZ spillover = long-term anchor. Right-of-first-refusal over WCT assets = growth kicker.
Ideas to Explore/Consider:
☑ Subscribe to IPO for defensive yield + capital upside.
☑ Long-term REIT hold with strong NPI margin profile (69.3%).
📌 Other Investment Opportunities
Johor Plantations – CPO Leverage + Payout Policy
Johor Plantations
1Q profit +52% YoY. Declared 1 sen dividend. 50% payout policy.
☑ Income exposure to firmer CPO (~RM3,886/t).
☑ Nibble for Johor palm exposure; policy backdrop supports prices.
Malayan Flour Mills – Turnaround on the Table
Malayan Flour (KL:MFLOUR)
JV losses narrowing. FY25 capex RM215m toward automation + poultry expansion.
☑ Speculative recovery play; average in <55 sen.
☑ Watch for rupiah stabilisation + poultry margin lift.
Aviation – Airbus A220 Push Revs Up Regional Play
Capital A (KL:CAPITALA), MAHB (KL:AIRPORT)
Airbus courting Malaysian carriers. 400+ Airbus aircraft on order. A220 targets regional expansion.
☑ Accumulate Capital A on dips; narrow-body expansion + tourism tailwind.
☑ MAHB benefits indirectly via higher throughput + MRO utilisation.
AI Sovereignty – Malaysia’s Full-Stack Bet
YTL Power (KL:YTLPOWR), TM (KL:TM), SNS Network (KL:SNS)
Southeast Asia’s first full-stack AI infra launched (Huawei chips, DeepSeek LLM). Cross-border data zone with Shanghai activated.
☑ Long-term thematic: accumulate AI infra enablers.
☑ National AI sovereignty = tailwind for local data centres and integrators.
Rare Earths – Policy Unlock for REE Mining
Lynas (ASX:LYC)
Malaysia pushes REE mining via state SOPs. Lynas begins heavy REE separation at Gebeng.
☑ Retain/accumulate Lynas – only commercial producer outside China.
☑ Watch for local juniors pending licence announcements.
📋 Collection of Ideas to Explore
✅ Johor Catalysts: UEM Sunrise, AME Elite, MMC, Gamuda
✅ Energy Growth: KAB, PetGas, MISC (LNG pipeline)
✅ Financial Rebound: Affin Bank – CASA mix, M&A lens
✅ AI Infrastructure: YTL Power-DC, Telekom Malaysia, SNS
✅ Retail Income: Paradigm REIT – IPO subscription + yield
✅ Aviation Rebound: Capital A, MAHB (Airbus fleet pivot)
✅ Plantation Income: Johor Plantations – CPO proxy
✅ Turnaround Play: Malayan Flour – automation + poultry
✅ Rare Earths: Lynas – early mover in REE separation
⛔ Avoids: PeterLabs (governance), Theta Edge (placement fail), Sarawak Cable (PN17 risk)