MIDF Amanah Investment Bank Bhd (MIDF Research) has reaffirmed its BUY call on SD Guthrie Bhd with a target price of RM5.43. The research house cited the company's strategic collaboration to develop a 472-ha industrial park in Bukit Pelandok, Negeri Sembilan.

MIDF Research views this move as a timely venture that aligns with SD Guthrie's rebranding strategy and positions the company for long-term value accretion.

The memorandum of understanding, signed with property developer Eco World Development Group Bhd and Negeri Sembilan's state investment arm, NS Corp, is part of SD Guthrie's plan to leverage its extensive landbank and tap into high-growth sectors within the Malaysian Vision Valley 2.0 (MVV 2.0) economic corridor. The park, valued at RM2.95 billion in gross development value, is strategically located near Kuala Lumpur International Airport and the North-South Expressway, offering significant logistical advantages.

The research house highlighted that the development site represents only 1.3% of Negeri Sembilan's total planted area, reflecting SD Guthrie's ability to maintain its plantation focus while exploring diversified revenue streams. The industrial park is expected to benefit from MVV 2.0, which spans key industries such as logistics, biotechnology, electronics, and aerospace, further enhancing the region's economic potential.

SD Guthrie's healthy balance sheet was also emphasised as a strong point. With a gearing ratio of approximately 0.25 times, well below the property sector's average of 0.4 times, analysts noted that the company is in a robust financial position to pursue new vertical income streams. This includes industrial land sales and joint ventures, both of which are anticipated to contribute to recurring earnings and double-digit margins.

Although no specific earnings guidance has been provided, MIDF Research views the industrial park project as a critical component of SD Guthrie's strategy to build new revenue pillars and enhance its earnings outlook over the mid to long term. The analysts reiterated their confidence in the company's growth prospects, maintaining their earnings forecasts while awaiting further details on the project.

The industrial park is also seen as a reflection of SD Guthrie's commitment to capitalise on the opportunities within MVV 2.0, a major economic initiative spanning 153,411ha across Seremban and Port Dickson, designed to complement the growth of Greater Kuala Lumpur. With this strategic move, SD Guthrie is expected to strengthen its position in high-value sectors while continuing to generate sustainable returns for shareholders.