The winners of JS-SEZ
THE Johor-Singapore Special Economic Zone (JS-SEZ) is creating ripples of excitement among investors, with companies across various sectors poised to benefit from the transformative initiative.
The development, bolstered by strong commitments from both governments is already catalysing activity in Johor with Maybank Investment Bank (Maybank IB) Research identifying several beneficiaries likely to thrive in the new economic landscape.
“The market has reacted positively as the signing of the JS-SEZ agreement (on Jan 7) validates implementation of the government’s initiatives,” the research house states, following its visit to Johor a week after the signing.
The research house notes that the companies identified as key beneficiaries – spanning property, data centres, smart cities, industrial parks and plantations – stand ready to harness the vast potential of the JS-SEZ.
Property sector leads the pack
At the forefront of this transformative initiative is the property sector.
Maybank IB Research has pinpointed Eco World Development Group Bhd (EcoWorld) as its proxy for the JS-SEZ.
EcoWorld’s Quantum Edge Business Park (QEBP) in Kulai is already showing promise, with secured land deals involving major players like Microsoft and Princeton Digital Group.
“QEBP is expected to start contributing to earnings from 2025 onwards,” notes Maybank IB Research. “Management is actively negotiating with data centre operators and could secure one to two data centre-related land sales by the end of 2024/2025.”
Other property players like SD Guthrie Bhd are also well-positioned. With a vast landbank in Kulai spanning over 12,842 acres, SD Guthrie stands out as a prime beneficiary.
A recent partnership with AME Elite Consortium Bhd to develop a green industrial park near the Kulai toll plaza exemplifies SD Guthrie’s readiness to monetise its land.
“SD Guthrie’s willingness to monetise land via outright sales or forming joint-venture entities will help provide steady recurring development income, while enhancing the remaining land’s value over time,” the research house highlights.
Kuala Lumpur Kepong Bhd (KLK) is another significant player with its 7,733 acres of land in Iskandar. While KLK has yet to announce specific development plans, Maybank IB Research anticipates the JS-SEZ to act as a catalyst, accelerating the company’s efforts in the near future.
Data centres as growth engine
The JS-SEZ is also shaping up as a hub for data centres, with YTL Power International Bhd taking the lead.
Its Johor Data Centre Park in Kulai is progressing rapidly, with the first phase, JDC 1, operational since May 2024. “JDC 1 has an IT load of 48MW expandable to 72MW with an anchor tenant already taking up 32MW,” Maybank IB Research reports.
The second and third phases, focusing on artificial intelligence servers housing and hyperscale customer needs, are under construction, positioning YTL Power as a frontrunner in this high-growth sector.
An on-site solar farm is also in the pipeline, underlining the sustainability focus of the development. “We continue to view YTL Power’s risk-reward favourably,” says the report, reiterating a “buy” rating with a target price of RM4.70 per share.
Smart city developments
ITMAX System Bhd is another standout beneficiary, leveraging its expertise in smart city infrastructure. With Johor accounting for about 12% of ITMAX’s revenue in 2024, the share is expected to grow to 21% by 2025, thanks to its pivotal role in the state’s “Smart City 2030” blueprint.
“ITMAX has signed an memorandum of understanding with Johor Land Bhd for the smart city infrastructure development of two key economic hubs in Sedenak,” notes the researchhouse.
The company is well-positioned to secure new contracts as JS-SEZ investments, estimated at RM200bil by 2030, gain momentum.
Industrial, petrochemical growth
The JS-SEZ’s comprehensive development plan also extends to both industrial and petrochemical sectors. Dialog Group Bhd is poised to benefit significantly due to its assets in the Pengerang Integrated Petroleum Complex (PIPC).
“As the JS-SEZ development unveils more incentives to attract investors into PIPC, Dialog will be a key beneficiary,” Maybank IB Research highlights.
Dialog’s existing capacity of 5.1 million cubic metres, coupled with 500 acres of vacant reclaimed land, provides ample room for expansion.
Another key industrial player is AME Elite Consortium, noted for its expertise in industrial park development.
Its collaboration with SD Guthrie to establish a green industrial park further underscores its critical role in the JS-SEZ.
Land monetisation opportunities
Plantation companies with landbank in strategic areas are also expected to reap rewards.
Genting Plantations Bhd (GenP) has been actively converting its estates into property developments, with its Genting Indahpura township as a testament to this strategy.
“We estimate GenP’s 6,266 acres land in Kulai to be valued at around RM3.475bil,” Maybank IB Research notes, adding that the company is open to monetisation opportunities that enhance its township’s value.
According to the research house, development of the Rapid Transit System connecting Johor Baru and Singapore is on track for completion by the end of 2026.
This infrastructure upgrade further boosts investor confidence, enhancing connectivity and reinforcing the JS-SEZ’s attractiveness.