Suria Capital Holdings Berhad has formalised the development of the Jesselton Docklands 2 project in Kota Kinabalu through a joint development agreement (JDA) with Jesselton Docklands 2 Sdn Bhd, a venture between Suria and BEDI Development Sdn Bhd. The project spans 11.54 hectares and is expected to generate a net development value (NDV) of RM3.32 billion, making it a significant undertaking in the region. This follows a similar agreement signed for Jesselton Docklands 1. The development will focus on tourism, including the construction of an international cruise terminal, ferry terminal, luxury hotels, and high-end commercial spaces.

MIDF Stock Broking House maintain a SELL recommendation on Suria Capital Holdings, with an unchanged target price of RM1.60. The stock is expected to see a share price return of -20.4%, with a dividend yield of 2.3%, resulting in a total expected return of -18.1%. Despite the promising development, the long gestation period for Jesselton Docklands 2, projected to take 15 years, tempers any immediate optimism. The stock is currently trading at 12.9 times its forecasted FY25 earnings, which is higher than its five-year historical average, leading analysts to advise caution.

Suria's share of the Jesselton Docklands 2 project is estimated at RM431 million, which constitutes 13% of the minimum NDV. The project aims to tap into Sabah's tourism potential, featuring commercial suites, waterfront apartments, fine dining establishments, and a yacht club, among other attractions. Suria will receive its entitlement through cash and in-kind contributions, including the internal cruise terminal. If the NDV exceeds the minimum RM3.32 billion, Suria will be entitled to 13% of the excess value.

While this project is part of Suria's strategy to diversify beyond port operations, the lengthy development timeline limits near-term benefits. A potential catalyst for Suria's stock performance could come from a resolution on the long-pending tariff revision for its port operations, though no timeline has been set.