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NCT Alliance Berhad (KLSE: 0056) – From Traditional Developer to Industrial Powerhouse Investment Summary
NCT Alliance Berhad (“NCT”) is undergoing a significant strategic transition from a conventional residential and commercial property developer into a diversified industrial park and sustainable infrastructure developer. This shift is supported by the injection of key industrial assets in Selangor and Kedah by major shareholders Dato’ Sri Yap Ngan Choy and Dato’ Yap Fook Choy via a share-swap exercise. The structure of the transaction preserves cash resources strengthens the Group’s balance sheet position and materially expands its development pipeline. The move aligns NCT with long-term structural drivers including supply chain diversification, e-commerce growth, renewable energy adoption, and Malaysia’s push for advanced manufacturing. By repositioning towards industrial real estate: a segment characterised by higher demand visibility and more stable earnings, NCT is well placed to deliver more predictable and sustainable growth over the next decade.
Expanding Landbank and Development Pipeline
Following the asset injection, NCT’s landbank increased to approximately 1,350 acres, underpinning more than a decade of development visibility. The Selangor and Kedah industrial parks alone contribute around RM4.8 billion in gross development value (“GDV”) over the next six years. Including additional development land in Sabah, the Group’s overall GDV potential now stands at approximately RM13 billion.
The recent acquisition of NCT World further enhances the Group’s project pipeline, expanding the total GDV from RM5.36 billion previously to approximately RM10.17 billion. This enlarged pipeline provides a significantly broader base for revenue and profit generation and establishes NCT as a credible mid-sized developer in Malaysia’s industrial and sustainable infrastructure space.
Core Growth Driver: Selangor Smart Industrial Park (SSIP)
The flagship Selangor Smart Industrial Park (“SSIP”) is expected to be a key earnings contributor in the medium term. As Malaysia’s first officially certified managed industrial park, SSIP benefits from proximity to major air and sea logistics hubs and offers advanced Industry 4.0 infrastructure, ESG-compliant designs, and integrated digital systems. Phase 1 is almost fully sold, while Phase 2 is now underway with growing interest from multinational tenants.
Negotiations are progressing with multiple Chinese companies exploring “park-within-a-park” collaborations that could introduce data centres, pharmaceutical facilities, logistics operations, and related supply chain investments. Such partnerships would enhance project visibility, drive recurring revenue streams, and further position NCT as a critical enabler of Malaysia’s industrial expansion strategy.
In parallel, the IDRISS development in Selangor and the Delapan SBEZ project in Kedah deepen the Group’s exposure to foreign investment and industrial policy priorities, strengthening its competitive position in the industrial land market.
Diversification into Renewable Energy and Sustainable Ecosystems
NCT is also extending its capabilities into renewable energy generation and low-carbon urban development. These strategic adjacencies complement the industrial park business, enabling the Group to integrate green energy solutions into its projects and capture emerging demand linked to ESG compliance and sustainable infrastructure investment. Over time, these initiatives are expected to enhance project margins and diversify earnings streams.
Our Verdict
The Group’s financial position remains robust, with a conservative gearing level of 0.29x and sufficient liquidity to support future development phases. The asset-light structure of the recent transaction provides flexibility for capital allocation and funding of ongoing projects.
Based on the expanded development portfolio, rising industrial demand, and pipeline monetisation, NCT is projected to generate annual net profits of RM90 million to RM100 million within the next three to five years. Applying a conservative sector valuation multiple of 15x to 18x forward earnings suggest a potential equity valuation range of RM1.35 billion to RM1.80 billion. Currently, the market capitalisation of NCT is trading at RM965.8 million, where post-acquisition via issuance of 104.2 million ordinary shares and non-immediate dilutive Redeemable Convertible Preference Shares (“RSPS”), we expect minimal changes on the immediate market capitalisation, rendering a potential upside of 39.78% ~ 86.37% ahead.
Key re-rating catalysts include further sales progress in SSIP Phase 2, execution of foreign investment partnerships, development of renewable energy projects, and accelerated monetisation of the RM10.17 billion pipeline. Continued delivery against these milestones will likely support sustained earnings growth and valuation expansion.
We initiate coverage with a BUY recommendation and a fair value range of RM1.00–RM1.35 per share, underpinned by strong earnings visibility, structural growth exposure, and a strengthened balance sheet. NCT is well positioned to emerge as one of Malaysia’s leading mid-cap industrial development and sustainable infrastructure platforms over the next decade.
