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You may think that being a privatized port operator for the whole of Sabah would make Suria Capital a company with good returns. Unfortunately over the past 12 years, the company only achieved an average ROE of 6%.



In fact quite a substantial part of its profits came from non-port operations such as property and investments.

I think this is because the economic activities in Sabah is not as developed as those in Peninsular Malaysia. While it is a growing economy and it may some time before we see Suria Capital benefiting from this.

Moral of the story? This is really a stock for the very long-term investor at the current market price.

Hi i4value,

Coincidentally, this is 1 of those companies in icapital.biz portfolio that I looked at.

- Most of its assets are "concession assets" (65% of equity) - the right to operate 8 Sabah ports in Sabah. The port business accounts for majority of its revenue at ~80% and it has the typical infrastructure operating margins, ie. NPM~25%. The gearing is <10% and so if the ROE is low, does that mean that it paid too much to the Sabah Gov for the concessions?

- It has 100mil RM of investment securities on its balance sheet and they are understood to be unit trusts. When I saw it, it just reminded me of Bung Moktar's court case as below:
https://www.malaysianow.com/news/2023/09...graft-case

- They got a 900mil funding from the Federal Gov to upgrade their ports. I am not sure if they need to contribute as well but it is a great thing if the Federal Gov (which is dependent on Sabah political support) chips in - Just like the US chip Act.

- Main ownership: Qhazanah Sabah bhd, the investment arm of the Sabah State government (45%), Yayasan Sabah (3.67%) and Sabah CM office (1.67%) - So the Sabah State Gov has effective control. Plenty of politicians and turnover at BOD level.

Long term? Wrong term? It's anyone guess.

The book value has been "bumped" up by the way it recognized the sale of the land. As such I would not consider property development as part of the operating earnings from a DCF valuation perspective.