Suria Capital is poised to transform itself into a conglomerate with exposure to property development and Sabah tourism through the iconic Jesselton Quay waterfront development with SBC Corp Bhd .
The iconic project that is expected to be the main tourism and commercial hub for Sabah in the longer term, said Kenanga Research.
“More importantly, we believe that the market has yet to fully price in the potential from Jesselton Quay and the remaining seven acres land earmarked for further development,” the research house commented.
Kenanga Research has initiated coverage on Suria Capital with “outperform” call. It pegs the target price of RM3.43, representing over 30% potential upside return.
In a note today, the research house also noted that Suria Capital, which secured a 30-year concession for main ports in Sabah since 2004, has a consistently growing earning base in the past few years through several market cycles.
Kenanga’s target price of RM3.43, which is derived from discounted cash flow, implies a forward financial year of 2015(FY15) price/earnings ratio of 15 times, which also incorporated the present value cash flow streams from the Jesselton Quay project.
Suria Capital's share price gained one sen to RM2.60 in the morning session with a market capitalisation of RM736.65million.
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