Sabah, Sarawak shipping to boost MTTSL post-listing

KUCHING (April 3): Main market-bound MTT Shipping and Logistics Bhd’s (MTTSL) earnings are projected to grow steadily over the next three years, supported by tight vessel supply and sustained demand for domestic shipping services.

Analysts at TA Securities project the group’s net profit to rise 27.8 per cent to RM295.4 million in FY2025, followed by further increases of 5.7 per cent to RM312.3 million in FY2026 and RM330.0 million in FY2027.

The earnings outlook is supported by expected revenue growth of 10 per cent, 8 per cent and 8 per cent over the same period, alongside core profit margins easing slightly but remaining firm above 21 per cent.

TA Securities in a note on Thursday said the projections are based on favourable supply dynamics its operation segment.

“With the sub-4,000 twenty-foot equivalent unit (TEU) order book at just 14.6 per cent of existing fleet capacity versus a global average of 35.9 per cent, meaningful fleet renewal remains limited, creating a persistent capacity undersupply that supports elevated charter and freight rates,” it said in a note on Thursday.

Meanwhile, the group’s initial public offering (IPO) is priced at RM1.03 per share, while TA Securities has assigned a fair value of RM1.25, implying a potential upside of about 21 per cent.

According to TA Securities, the premium is justified by its market-leading position in Malaysia’s domestic cabotage segment, underpinned by high barriers to entry, limited competition, and an entrenched service network across East Malaysia.

This is further supported by its largest and youngest fleet, which drives superior operational efficiency and enables the group to capture attractive margins relative to peers.

Its prospectus also outlined its focus on East Malaysia where logistics infrastructure gaps present growth opportunities.

It is developing a network of Integrated Freight Facilities (IFFs) across Sabah and Sarawak to strengthen end-to-end logistics capabilities. These facilities will feature modern warehousing, cold chain infrastructure and digital systems, targeting sectors such as fast-moving consumer goods and electronics.

The first IFF in Kota Kinabalu has been completed, while additional facilities are planned in Port Klang, Kuching and Bintulu, with full integration targeted by 2028.

At the same time, MTT Shipping is expanding its fleet with eight new vessels to capture domestic and regional opportunities, while improving backhaul utilisation from East Malaysia to enhance efficiency.

“Domestically, the group is well-positioned to capture projected Malaysian container volume, aided by a significant improvement in backhaul utilisation from East Malaysia, which reduces empty container repositioning costs and improves per-voyage profitability,” it said.

The group is also scaling up its containerised automotive logistics segment and expanding depot capacity in key locations, including Kuching and Bintulu.

These initiatives are expected to reinforce its role as a key logistics backbone linking Peninsular and East Malaysia, while supporting long-term cargo growth.