Research house Kenanga remains cautious on seaport operators in general, buffeted by a weak outlook for global trade. The WTO recently downgraded its global trade growth forecast for2022 to3%, while remaining cautious for 2023 at 3.4%. A recession in Europe is almost a foregone conclusion given the protracted Russia-Ukraine war, resulting in an energy crisis.
Meanwhile, there is no sign of China coming out of the pandemic anytime soon given Beijing’s ineffective zero-Covid policy which is prolonging global supply chain disruptions. Globally, consumer confidence and spending are likely to take a beating on sustained elevated inflation, rising interest rates, and as households deplete their pandemic relief funds. However, it believes BIPORT will be able to weather these macro challenges better thanks to its stable operation in the handling of LNG cargoes, a potential hike in tariffs of Bintulu Port as well as the long-term growth potential of Samalaju Industrial Port’s hinterland in Samalaju, Sarawak driven by the growing investment in heavy industries.
As it views, the logistics will ride on e-commerce boom. However, Kenanga sees a bright spot in the logistics sector locally given that: it is primarily driven by domestic demand, and (ii) it is also backed by a mega trend of growth in domestic ecommerce. Industry experts project local e-commerce gross merchandise volume to grow at a CAGR of 11% from
2022 to 2027, while its size could reach RM1.65t by 2025 from RM1t currently.
The booming e-commerce will spur demand for distribution hubs and warehouses to enable: just-in-time delivery, reshoring/nearshoring to bring manufacturers closer to end-customers, efficient automation system including interconnectivity with the customer system, and warehouse decentralisation to reduce transportation costs and de-risk the supply chain. There is also a strong demand for cold-storage warehouses on the back of the
proliferation of online grocery start-ups.
