Maybank Investment Bank Berhad
July 3, 2025

Genting Plantations: Property Boom Drives Earnings Upside on Johor-Singapore SEZ Optimism

Overview: Property Projects Fueling Genting Plantations’ Growth

Genting Plantations Berhad (GENP MK) is experiencing a surge in property earnings, driven by robust demand in Johor, Malaysia. The company’s latest launches in the region, especially the U.Reka residential project and Genting Industrial City (GIC), are seeing high take-up rates, setting the stage for visible earnings growth in the second half of 2025 and into 2026.
The boost is underpinned by:

• Strong unbilled sales of MYR157 million as of March 31, 2025—equivalent to approximately 1.2 times FY24 property revenue.
• Successful launches and rapid construction progress, notably at U.Reka and GIC.

Maybank Investment Bank maintains a BUY rating with a target price of MYR6.89, based on 19x FY25 PER (-1SD of 8-year mean).

U.Reka: Johor-Singapore SEZ Hype Sparks Residential Buying Frenzy

GENP’s flagship residential development, U.Reka in Kulai, Johor, has become a standout success. The project’s Phase 1 launch on May 10, 2025, saw all 189 non-bumiputera units snapped up on the same day, reflecting overwhelming demand.
Key highlights:

• Phase 1 consists of 317 mixed residential units, with a gross development value (GDV) of MYR275 million.
• The entire U.Reka project spans 306 acres, with 2,611 units planned over 10 years and a total GDV of MYR2.5 billion.
• Construction began ahead of the sales launch and had already reached 30% completion by end-June 2025.
• The project features modern design and a secure, gated-guarded environment.

Genting Indahpura: Expanding a Thriving Township

Genting Indahpura has evolved since 1996 into a vibrant township in Kulai, Johor, home to landmarks such as Johor Premium Outlets, a government administration center, Foon Yew High School, and AEON Kulai Mall. With most industrial parcels developed, GENP is now prioritizing commercial and residential offerings—including the highly successful U.Reka.

Batu Pahat’s Genting Industrial City: Industrial Demand Remains Strong

GENP’s second major Johor development is Genting Pura Kencana (GPK) in Batu Pahat, where only 200 of its 9,200 acres have been developed to date. The ongoing Genting Industrial City (GIC) project, poised to be the largest industrial park in Batu Pahat, spans 1,200 acres of freehold land and is less than 10km from the city center.
Key stats for GIC:

• Phase 1 (launched end-2024) covers 208 acres and features:
  • 60 terrace factories (MYR770,000/unit)
  • 62 semi-detached factories (MYR1.9 million/unit)
  • 26 detached factories (MYR3.7 million/unit)
• Estimated GDV for Phase 1: MYR260 million
• Take-up rate for non-bumiputera units: 82% as of May 2025
• Construction is progressing rapidly, with several units near completion

Financial Performance and Outlook

GENP is set to recognize MYR141 million and MYR147 million in property revenue for FY25E and FY26E, respectively, with operating profit from property expected at MYR32 million and MYR34 million. Property (including premium outlets) is projected to contribute around 17% of group FY25E profit before interest and tax (PBIT).

Key Financial Metrics (MYR million, unless stated)

Balance Sheet and Cash Flow Highlights

• Total assets grew from MYR8.57 billion (FY23A) to an estimated MYR9.73 billion (FY27E).
• Net cash flow fluctuated, with a major inflow of MYR832.7 million in FY24A due to operational improvements.
• Capex remains steady, averaging around 12-14% of revenue across the forecast period.
• Dividend payouts have a ratio of 42-74%, supporting attractive yields for investors.

Shareholder Structure and Market Capitalization

GENP maintains a market capitalization of MYR4.4 billion (USD1.0 billion), with the following major shareholders:

• Employees Provident Fund: 13.5%
• Kumpulan Wang Persaraan: 7.6%
• Kopernik Global Investors LLC: 1.2%
• Free float: 86.5 million shares
• Total issued shares: 897 million

Share Price Performance and Valuation

• Current share price: MYR4.93
• 12-month target price: MYR6.89 (+45%)
• 52-week high/low: MYR5.97/MYR4.75
• 3-month average turnover: USD0.3 million
• Absolute return over 1, 3, and 12 months: +1%, -6%, -18% respectively
• Relative to index: -2%, -7%, -15% over the same periods

Risks to Outlook

Key risks to GENP’s earnings and valuation include:

• Weather anomalies impacting palm oil output
• Lower-than-expected crude palm oil (CPO) prices
• Adverse policies from importing countries
• Unfavorable government regulations in Malaysia or Indonesia
• Sharp declines in crude oil prices affecting palm biodiesel demand
• Weakness in competing oil prices (e.g., soybean, rapeseed)

Conclusion: Bright Prospects Driven by Johor Property Momentum

Genting Plantations stands out in 2025 for its nimble execution and success in property launches, particularly in Johor. The company’s ability to pre-emptively start construction and achieve high booking rates has positioned it for a notable pick-up in earnings. With visible earnings streams from both residential and industrial property and a resilient plantation business, GENP is well-placed to capitalize on the region’s development boom, especially amid ongoing optimism over the Johor-Singapore Special Economic Zone.
Maybank Investment Bank reiterates its BUY call, citing the strong fundamentals, robust pipeline, and attractive risk-reward outlook for investors seeking exposure to Malaysia’s property and plantation growth story.