TA Securities believes that the Penang Transport Master Plan (PTMP) will serve as a significant catalyst for Penang’s construction sector, making the state an attractive destination for investors and developers. The research house is optimistic about Penang’s residential property market, driven by the robust recovery of the medical and tourism sectors on Penang Island post-pandemic, as well as the thriving industrial sector on both the island and the mainland.
Optimism in Penang’s Property Market
The recovery of the medical and tourism sectors, coupled with the industrial sector’s strength, is expected to fuel growth in Penang’s property market. TA Securities maintains an overweight stance on both the property and Malaysian Real Estate Investment Trusts (MREITs) sectors.
Key Beneficiaries of PTMP
The PTMP is not only aimed at improving transportation but also mitigating traffic congestion in the city. Gamuda Bhd and Kerjaya Prospek Bhd are identified as the primary beneficiaries of the master plan. TA Securities has a “buy” rating on Gamuda with a target price (TP) of RM5.19, given its substantial exposure in the Penang development project through SRS Consortium Sdn Bhd. Kerjaya Prospek also receives a “buy” call with a TP of RM1.57, owing to its strong track record in Penang’s construction sector.
Other potential beneficiaries highlighted by TA Securities include IJM Corporation Bhd (“buy,” TP: RM1.85), WCT Holdings Bhd (“buy,” TP: RM1.57), and Sunway Construction, known for its expertise in railway-related projects and civil works for township development.
Accelerated Implementation of PTMP
The alignment of political interests between the federal government and the Penang state government is expected to accelerate the implementation of the PTMP. Delays had previously occurred due to financial limitations, environmental concerns, and political issues.
Development of Penang South Island (PSI)
TA Securities remains positive about the development of the Penang South Island (PSI) despite the scaling down of the project. While Island B and Island C have been scrapped, the local government maintains its plan to develop Island A (Silicon Island) with concrete details and a timeline.
Long-Term Catalyst for Penang
The PTMP is anticipated to serve as a long-term catalyst, enhancing land value, stimulating economic activity, and driving housing demand in Penang. Property developers holding land in Penang Island are expected to benefit from improved road and public transport connectivity under the PTMP.
Additionally, potential beneficiaries of the Bayan Lepas LRT project include Eastern & Oriental Bhd, Ideal Capital Bhd, IJM Corp Bhd, Ivory Properties Group Bhd, and Mah Sing Group Bhd. Companies with landbank in mainland Penang, such as Eco World Development Group Bhd, Paramount Corp Bhd, Tambun Indah Land Bhd, and SP Setia Bhd, may also reap benefits from the improved road and rail network.
In conclusion, the PTMP is poised to bring about positive changes in Penang’s infrastructure and economy, making it an appealing prospect for investors and developers alike.