Johor-Singapore Special Economic Zone (JS-SEZ) – Key Stocks & ETFs to Watch

Phillip Nova高级投资分析师林知霖先生

*Note that all figures shown are in MYR unless otherwise stated

From a big-picture perspective, first-leg beneficiaries of the JS-SEZ are likely to be banks, construction, and property firms, who will benefit from initial investments and infrastructure development. In the longer-run, consumer stocks could benefit from sustained economic growth and wealth spillover effects.

ETF Watchlist:

• iShares MSCI Malaysia ETF (AMEX: EWM), Expense Ratio: 0.50% — Down -1.46% since 7 January (MYR terms). Tracks the MSCI Malaysia Index

• FTSE Bursa Malaysia KLCI ETF (KLSE: 0820EA), Expense Ratio: 0.98% — Down -3.00% since 7 Jan. Tracks 30 biggest listed companies that collectively represent the Malaysian stock market.

Shariah Compliant:

• Eq8 Dow Jones Islamic Market Malaysia Titans 25 ETF (KLSE: 0821EA), Expense Ratio: 0.54% — Down – 4.50% since 7 Jan. Provides exposure to 25 largest listed Shariah-compliant companies listed on Bursa Malaysia
• Eq8 MSCI Malaysia Islamic Dividend ETF (KLSE: 0824EA), Expense Ratio: 0.69% — Down -7.98% since 7 Jan. Tracks shariah-complaint securities with higher than average dividend yield that are deemed both sustainable and persistent by MSCI.

Stocks Watchlist:

Property Development:

• Rationale: The JS-SEZ will drive higher land values and demand for mixed-use developments. Proximity to Singapore and enhanced connectivity (via RTS Link or Johor LRT/ART) will make Johor properties more attractive.
• As FDIs pour into the SEZ, enterprises will require commercial spaces while employees will demand residential spaces. Affordable housing players like Lagenda and industrial developers like AME Elite can also benefit.
• 受益人： Developers with significant landbanks near flagship SEZ zones (e.g., Iskandar Puteri, Kulai) will benefit.
  • UEM Sunrise (KLSE: 5148, BBG Consensus 12M Tgt Px: MYR 0.87) │ IOI Properties (KLSE: 5249, BBG Consensus 12M Tgt Px: MYR 2.44) │ EcoWorld (KLSE: 8206, BBG Consensus 12M Tgt Px: MYR 2.21) │ Mah Sing (KLSE: 8583, BBG Consensus 12M Tgt Px: MYR 1.88) │ Sunway Bhd (KLSE: 5211, BBG Consensus 12M Tgt Px: MYR 5.17) are well-positioned to benefit due to their substantial land banks in SEZ flagship zones.
  • AME Elite (KLSE: 5293, BBG Consensus 12M Tgt Px: MYR 1.93): Focus on industrial properties, benefitting from heightened demand for facilities driven by FDIs.
  • Lagenda Properties (KLSE: 7179, BBG Consensus 12M Tgt Px: MYR 1.69): Focus on affordable housing with landbanks in Kulai, situated near Sedenak.

Financials:

• Rationale: Banks will play a critical role in providing the financing needed for infrastructure and business expansion within the SEZ.
• Improved economic activity could also boost cross-border transactions, mortgage activity, and credit card fees. Providing a boost to banks’ non-interest income (NOII).
• 受益人：
  • Maybank (KLSE:1155, BBG Consensus 12M Tgt Px: MYR 11.01) │ RHB Bank (KLSE: 1066, BBG Consensus 12M Tgt Px: MYR 7.41) │ CIMB Bank (KLSE: 1023, BBG Consensus 12M Tgt Px: MYR 8.22) are likely to see greater demand for wholesale financing, particularly for large-scale projects.

Construction:

• Rationale: Infrastructure development is expected to be a cornerstone of the JS-SEZ. Public infrastructure projects like the Johor LRT/ART and other infrastructure developments (e.g. data centre projects) could open up opportunities for contractors.
• 受益人：
  • Gamuda (KLSE: 5398, BBG Consensus 12M Tgt Px: MYR 5.39) │ Sunway Construction (KLSE: 5263, BBG Consensus 12M Tgt Px: MYR 5.81) both have proven track records in large-scale infrastructure projects, which we think positions them well for JS-SEZ contract wins.
  • IJM Corp (KLSE: 3336, BBG Consensus 12M Tgt Px: MYR 3.31) │ Econpile Bhd (KLSE: 5253, BBG Consensus 12M Tgt Px: MYR 0.42) are developers currently involved with the RTS.
  • United U-Li Corp Bhd (KLSE: 7133, BBG Consensus 12M Tgt Px: MYR 1.83) could benefit from higher demand for cable support systems in construction. Malayan Cement (KLSE: 3794, BBG Consensus 12M Tgt Px: MYR 6.77) │ Ann Joo Resources (KLSE: 6556, BBG Consensus 12M Tgt Px: MYR 0.89) can also benefit as they provide building materials used in construction.

Utilities & Renewable Energy (RE):

• Rationale: The expected influx of investment projects will likely drive up energy demand within the SEZ, including the growing need for RE, as MNCs are increasingly committed to reducing their carbon footprint and complying with regulations.
• Electricity trading & RE cooperation: Singapore is aiming to import 30% of its energy from renewable sources by 2035; with Malaysia intending to export up to 300MW of RE to Singapore.
• The Corporate Renewable Energy Supply Scheme (CRESS), introduced in Sep 24, enables large corporates to purchase renewable energy directly from independent power producers. CRESS will likely gain stronger traction.
• 受益人：
  • Tenaga Nasional (KLSE: 5347, BBG Consensus 12M Tgt Px: MYR 16.05), who already signed an agreement with importer Sembcorp Power to supply renewable energy to Singapore. Other beneficiaries include Malakof (KLSE: 5264, BBG Consensus 12M Tgt Px: MYR 0.98) │ YTL Power (KLSE: 6742, BBG Consensus 12M Tgt Px: MYR 4.48).
  • BM Greentech (KLSE: 0168, BBG Consensus 12M Tgt Px: MYR 2.31) │ Solarvest (KLSE: 0215, BBG Consensus 12M Tgt Px: MYR 2.36) │ Pekat (KLSE: 0233, BBG Consensus 12M Tgt Px: MYR 1.75) can benefit with their expertise in RE, particularly in solar.

Industrial and Data Centres:

• Rationale: Industrial properties may see increased demand from MNCs relocating operations to Johor to leverage on its cost advantages.
• The establishment of the JS-SEZ is expected to drive further data centres investments within the region. Johor has reportedly secured ~80% of Malaysia’s approved digital investments in recent years.
• With its low costs and favourable policies, demand for industrial and data centre facilities will continue to grow.
• 受益人：
  • Critical Holdings (KLSE: 0291, BBG Consensus 12M Tgt Px: MYR 1.62) │ HE Group (KLSE: 0296, BBG Consensus 12M Tgt Px: MYR 0.45) │ MN Holdings (KLSE: 0245, BBG Consensus 12M Tgt Px: MYR 1.72) are well-positioned as contractors specializing in industrial buildings and data centres.

Consumer & Logistics:

• Rationale: In the long-run, job creation and higher household incomes in the SEZ could boost retail and F&B consumption. Per Johor Chief Minister Onn Hafiz, the JS-SEZ is targeted to create 400k high-income jobs, raising household income to RM13k/month.
• Enhanced cross-border mobility and connectivity could drive regional and international tourism. Cross-border business travel is likely to surge.
• At the same time, demand for logistics services will surge given the expected increase in trade flows between Johor and Singapore.
• 受益人：
  • SWIFT Haulage Bhd (KLSE: 5303, BBG Consensus 12M Tgt Px: MYR 0.39) │ Tiong Nam Logistics (KLSE: 8397) are logistics services providers with major operations in Johor.
  • MR DIY (KLSE: 5296, BBG Consensus 12M Tgt Px: MYR 1.92) │ AEON (KLSE: 6599, BBG Consensus 12M Tgt Px: MYR 1.76) have substantial operations in Johor, and are likely to be beneficiaries of an increase in consumer spending—driven by rising household incomes and job creation in the SEZ.

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