NPE extension set to unlock RM5.6bil in economic benefits: analysts
KUALA LUMPUR: The long-anticipated New Pantai Expressway (NPE) extension is expected to generate RM5.6 billion in economic spillover benefits and catalyse development in the Bangsar fringe area.
The NPE extension has received official approval from the Ministry of Works, signalling a major step forward in Kuala Lumpur's infrastructure upgrade under the Traffic Master Plan 2030.
IJM Corp Bhd confirmed that the RM1.4 billion project—initially cancelled in 2012—has been revived through renewed government engagement. As a fully private initiative, IJM will fund the construction in full.
Spanning 15 kilometres, the fully elevated highway will connect the Pantai Dalam Toll Plaza to the Jalan Istana interchange via Jalan Syed Putra. The extension will enhance traffic flow by integrating the NPE with the Besraya and the upcoming Laluan Istana Kiara Expressway (by Ekovest).
The improved link is expected to divert up to 40 per cent of traffic from Jalan Bangsar into central Kuala Lumpur.
IJM currently holds a 34-year concession (with about 12 years left before the extension) for the 19.6-km NPE, a key corridor connecting Subang Jaya to the capital, with major toll points including Pantai Dalam, PJS2, and PJS5, as well as the Kuchai Link and Pantai Sentral Park interchange.
The NPE was constructed between 2000 and 2004, with the expressway officially opening to traffic on April 30, 2004. The project was led by Road Builder (M) Holdings Bhd, which was acquired by IJM in 2007.
Datuk Lee Chun Fai, IJM's group chief executive officer and managing director, said the approval marks a key milestone in the group's ongoing efforts to improve urban mobility throughout the Klang Valley.
Other than NPE, IJM also wholly owns Besraya (M) Sdn Bhd, whose concession to operate the 28.9km Sungai Besi Highway ends in 2046 (previously 2040 before toll restructuring in 2022); a 50 per cent stake in Lebuhraya Kajang-Seremban Sdn Bhd, which has a concession to run the 44.3km Kajang Seremban Highway (Lekas) through 2064 (previously 2039); and an effective 41 per cent shareholding in the 233km West Coast Expressway Sdn Bhd, which is 80 per cent controlled by publicly traded WCE Holdings Bhd.
IJM has a 26.65 per cent stake in WCE, and its wholly owned Road Builder has a 20 per cent direct stake in the West Coast Expressway.
It also has four highways in India: the 79km Chilakaluripet-Vijayawada Tollway; the 19.8km Dewas Bypass Tollway (under construction); the 109km Solapur-Bijapur Tollway (under construction); and the 56km Western Access Tollway in Buenos Aires, Argentina.
Brokerages have responded positively to the news.
CIMB Securities said the project will immediately contribute RM1.4 billion in internal contracts to IJM's construction division while reinforcing its strategy to grow toll infrastructure assets and recurring income streams.
For the nine months ended December 31, 2024, IJM's toll segment reported a 58 per cent year-on-year decline in core pre-tax profit to RM27.1 million, impacted by RM53 million in associate losses.
NPE and Besraya collectively posted RM96 million in pre-tax profit, a 7.2 per cent YoY decline.
CIMB maintained its 'Buy' rating on IJM, with an unchanged sum-of-the-parts-based target price of RM3.26.
It said the project's RM1.4 billion contribution is within its FY26F new contract win estimate of RM4 billion.
However, it has not yet factored in earnings contributions from the expanded concession pending further updates.
Public Investment Bank Bhd also reaffirmed its 'Buy' call and TP of RM3.26, echoing that the brownfield project fits well with IJM's long-term toll infrastructure strategy and would deliver meaningful recurring revenue.
"We make no changes to our earnings forecast, as the expected order book accretion of RM1.4 billion from the NPE extension is within our new contract win estimates of RM4 billion for FY26F.
"Similarly, we have not factored in any contributions from the expanded NPE concession pending further updates on its operational parameters."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
4 hours ago
- The Sun
Paramount aims to maintain momentum after record high sales of RM1.4b in FY24
KUALA LUMPUR: Paramount Corporation Bhd is poised to build on the momentum of record high property sales amounting to RM1.4 billion in 2024, a 24% increase compared to 2023, for the current financial year. Group CEO and director Jeffrey Chew Sun Teong said the milestone of achieving the highest annual sales in its history underlines strong market demand and the company's effective project pipeline. In addition to the record-breaking achievement, Paramount's unbilled sales rose by 12% to RM1.6 billion, providing healthy earnings visibility moving forward. 'While the overall take-up rate was not exceptionally high, the company views this as a natural result of its large number of project launches in 2024. The company remains unfazed, noting that developments with longer sales periods are expected to register lower take-up rates initially, especially when launched at scale,' Chew told reporters after the Paramount's annual general meeting today. Moving forward, Paramount is expected to sustain its growth trajectory into 2025, supported by a robust pipeline of ongoing projects stemming from a record RM2.2 billion worth of property launches in 2024. 'This marked the highest launch value in the company's history, with many of the developments continuing to drive sales into the current year. The launches were well diversified, with 72% comprising high-rise units, 27% landed properties and the remaining 1% commercial. 'Spread across multiple locations, the breadth of projects reflects Paramount's strategic focus on maintaining a balanced portfolio, both in terms of product mix and geographical distribution, helping to ensure resilience amid varying market conditions,' Chew said. Paramount achieved revenue of RM1 billion in FY24, a 3% increase from FY23. The group's profit before tax (PBT) rose by 20% to RM156.9 million compared to RM130.2 million in FY23 on the back of sustained revenue from the property segment and dividend income from its investment in another property developer. Profit attributable to ordinary equity holders grew 24% to RM102.4 million from RM82.8 million in FY23. In FY24, the property segment achieved a record high PBT of RM145 million, contributing 92.4% of the group's total PBT, supported by revenue of RM965.3 million. The investment and other segments saw strong improvements, largely driven by the group's stake in Eco World International Bhd (EWI). The coworking segment reported an 80% jump in revenue to RM23.5 million (including RM5.2 million in intersegment revenue). However, PBT declined to RM700,000 from RM2 million achieved in FY23, primarily due to the absence of a one-off impairment reversal that was recognised in FY23. As of Dec 31, 2024, total assets stood at RM3.1 billion, up from RM3 billion a year earlier. Total liabilities rose to RM1.6 billion from RM1.3 billion. Chew said, 'Paramount's gearing level rose slightly in 2024, mainly due to higher borrowings and financing related to its investment in EWI. The company also refinanced its perpetual debt during the year, contributing to the increase. 'Gearing level is currently higher due to the structure of its financial instruments and recent refinancing activities. Despite this, the company has maintained a consistent dividend payout track record, distributing at least 38% of its profits annually over the past decade. 'In total, shareholders have received approximately RM1.15 in dividends over 10 years, exceeding the company's current share price of under RM1.10.' With RM2.2 billion worth of launches in 2024, Paramount's portfolio remains well diversified, comprising 72% high-rise developments, 27% landed properties and 1% commercial projects. This broad spread across product types and locations provides resilience against unforeseen challenges. The company believes this balanced approach will help sustain overall performance throughout the year, even if individual projects face temporary setbacks.
Rakyat Post
6 hours ago
- Rakyat Post
A Fresh Recipe for Success: Chef Wan's Restaurant Backer In RM30.8m Deal
Subscribe to our FREE Oasis Harvest Corporation, a food and beverage company listed on Bursa Malaysia, is making a big move in the restaurant world. They're planning to buy over Metta Food & Lifestyle, which holds an 80% stake in the companies operating 1958 by Chef Wan and Cafe Chef Wan restaurants, for RM30.8 million. The remaining 20% stake in these operating companies is owned by Chef Wan, whose real name is Datuk Redzuawan Ismail, through his company Redzuawan Ismail Holdings Sdn Bhd. The deal has an interesting twist because one of the key players, Datuk Seri Tan Ooi Han, wears multiple hats in this story. He's not just a big shareholder and executive director at Oasis Harvest – he's also involved with Metta as a shareholder, director, and one of the sellers. Details of the proposed acquisition have been Oasis Harvest bercadang utk ambil alih 100% ekuiti Metta Food (pengendali jenama 1958 dan Cafe Chef Wan) dengan nilai RM30.8 juta sebagai usaha strategik memperluaskan empayar F&B dan hospitaliti Chef Wan kekal sebagai ikon utama jenama 👍 — StratCommX (@StratCommX) Show Me The Money: Profit Promises and Payment Plans The sellers seem pretty confident about how well these restaurants will do. They're so sure that they've promised the restaurants will make at least RM5.6 million in profit over the next two years (until June 2026). As for how they're paying for all this, Oasis Harvest has it planned out. RM6 million will come from selling some property they own, and they'll borrow the remaining RM24.8 million from banks. Strategic Growth: Adding Star Power to the Restaurant Portfolio Ch'ng Eu Vern, who's an Executive Director at Oasis Harvest, explains that this purchase makes a lot of sense for them. This acquisition perfectly aligns with our strategic vision to diversify and strengthen our offerings in the F&B, travel, leisure, and hospitality sectors. Chef Wan's prominent brands will significantly complement and expand our existing portfolio They already own other restaurant chains, such as Uncle Don's and Verona Trattoria, and adding these Chef Wan restaurants will help them expand further in the food, travel, and hospitality industries. Once everything's finalised, Oasis Harvest plans to find ways to run all its restaurants more efficiently together. It's like adding new members to their restaurant family, but making sure everyone works well together. Proof in the Pudding: Growth and Success While some social media comments have questioned why Chef Wan doesn't fully own his 1958 and Cafe Chef Wan restaurants, the current 20% ownership structure through his holding company, is The misconception that celebrity chefs should be sole proprietors overlooks the complex reality of running a restaurant chain, where substantial capital investment and business expertise are crucial for success and expansion. The current partnership model has proven effective, with the brand expanding to eight outlets across the Klang Valley and Melaka, while maintaining its quality standards and brand value. The proposed RM30.8 million acquisition deal by Oasis Harvest, which is still pending finalisation, would further validate the effectiveness of this business model, suggesting that having professional investors and operators handle the business side is beneficial. At the same time, the celebrity chef's focus on culinary excellence and brand development can be a winning formula in the competitive food and beverage (F&B) sector. Chef Wan Sets the Record Straight on Business Structure As Chef Wan clarified in his social media post, he maintains his 20% equity in the business through Metta (the investment company that owns 80% of the group of companies), and continues to manage the recipes, kitchen and chefs. At the same time, his business partner handles overall management. Beyond the equity stake, Chef Wan also receives 5% of the gross monthly revenue for living expenses—a business structure he chose after consulting with corporate lawyers and successful corporate friends to leverage his global brand and recipes, which he has built over 37 years in the industry. He strongly criticised those spreading misinformation and calling for boycotts based on racial issues regarding Chinese investors, warning that such defamatory statements could lead to legal consequences. As he pointed out, many businesses in Malaysia operate through multi-racial partnerships, and he urged critics to 'do their homework' before making unfounded accusations. Parts of this story have been sourced from Share your thoughts with us via TRP's . Get more stories like this to your inbox by signing up for our newsletter.
New Straits Times
a day ago
- New Straits Times
Oasis Harvest to buy Chef Wan-branded restaurant, cafe chains for RM30.8 mil
KUALA LUMPUR: Oasis Harvest Corporation Bhd, a Bursa Malaysia-listed food and beverage (F&B) player, has proposed to acquire the entire equity interest in Metta Food & Lifestyle Sdn Bhd (Metta) for RM30.8 million. Metta is the operator of banquet-themed restaurants and cafes under the brands 1958 by Chef Wan and Cafe Chef Wan. In a statement today, Oasis Harvest executive director Ch'ng Eu Vern said the acquisition includes a profit guarantee from the vendors, ensuring Metta achieves a cumulative audited profit after tax of at least RM5.6 million over two years ending June 30, 2026. This reflectes strong confidence in the long-term growth and profitability of the enlarged group, he said. "This acquisition perfectly aligns with our strategic vision to diversify and strengthen our offerings in the F&B, travel, leisure, and hospitality sectors. Chef Wan's prominent brands will significantly complement and expand our existing portfolio," he added. According to Ch'ng, the strategic acquisition will enable Oasis Harvest to broaden its culinary offerings, benefiting from Metta's market recognition, operational expertise, and the prestigious reputation of international celebrity chef Datuk Redzuawan Ismail, famously known as Chef Wan. Post-acquisition, Oasis Harvest intends to streamline Metta's operations with existing brands such as Uncle Don's and Verona Trattoria. In a filing with Bursa Malaysia yesterday, Oasis Harvest said the purchase will be financed partly by reallocating existing proceeds from a proposed property disposal (RM6 million) and supplemented by bank borrowings (RM24.8 million). The proposed acquisition is deemed as a related party transaction as Datuk Seri Tan Ooi Han, who is Oasis Harvest executive director and major shareholder, is also a vendor as well as a director and shareholder of Metta. SCS Global Advisory (M) Sdn Bhd has been appointed as the independent adviser to advise the non-interested directors and non-interested shareholders of the company in relation to the proposed acquisition.
