SD Guthrie’s bigger stake in project to bring higher profits

PETALING JAYA: SD Guthrie Bhd’s move to raise its equity stake in Eco Business Park 8 Sdn Bhd (EBP8) from 25% to 45% is expected to translate into a bigger share of the joint-venture development’s profits in the future, albeit at the cost of a smaller estimated land disposal gain in the near term, analysts say.

Maybank Investment Bank Research (Maybank IB) said with SD Guthrie raising its equity stake in EBP8 in Kulai, Johor, from 25% to 45%, it expects a smaller estimated land disposal gain of RM364mil (from RM526mil) to be recognised in the second half of next year (2H26), with the rest deferred to future years.

With this, SD Guthrie would have a bigger share of the development’s profits in the future, it added.

On Dec 2, SD Guthrie and its partners, Eco World Development Group Bhd (EcoWorld Malaysia) and Permodalan Darul Ta’zim Sdn Bhd (PDT), agreed to amend the shareholding proportions in EBP8.

Under the new agreement, the partners agreed that PDT shall retain a 10% stake in EBP8, while SD Guthrie and EcoWorld Malaysia shall hold 45% each (from 25% and 65% previously).

The agreement between the shareholders to amend and restate the share sales agreement reflects SD Guthrie’s confidence in the strength of EBP8 and positive long-term view on the prospects of Iskandar Malaysia, which is part of the strategic Johor-Singapore Special Economic Zone (JS-SEZ), the research firm noted.

The development of EBP8 is envisaged to be implemented over 10 years with a preliminary gross development value (GDV) of about RM3.75bil.

The project will feature a mix of industrial lots, ready-built factories, and commercial components, tailored for growth sectors such as electrical and electronics, logistics, advanced materials, and clean technology.

Maybank IB said it is not making any changes to its estimates for SD Guthrie’s earnings next year, which already incorporated RM500mil in profit contribution for the industrial development.

The research house has a “buy” call on SD Guthrie with an unchanged target price of RM5.75 on 0.55 times revalued net asset value. For the third quarter of this year (3Q25), SD Guthrie posted a net profit of RM935mil, up from RM766mil in the same quarter last year. Earnings per share rose to 13.5 sen from 11.1 sen previously.

The group reported quarterly revenue of RM5.41bil compared with RM5.27bil in the year-ago quarter.

SD Guthrie recorded a strong performance for the first nine months of this year, with a net profit of RM2.01bil.

This represented a 43.75% earnings jump over the RM1.39bil in the same period last year. Revenue during the period was 5.65% higher at RM15.4bil against RM14.57bil in the previous comparative period.

SD Guthrie Bhd said it is looking to wrap up the year with a strong performance as it builds on the positive momentum of its new business segments.

In a filing with Bursa Malaysia earlier this week, SD Guthrie group managing director Datuk Mohamad Helmy Othman Basha said the group is actively progressing several promising collaborations in industrial developments and the renewable-energy business.

He added that there has been meaningful progress in the new business segments, particularly in industrial developments.

He added that crude palm oil prices would be supported by expectations of tighter supply during the coming seasonally low output cycle.