Upon commissioning in 2028, two large-scale hydrogen plants in Bintulu will generate green energy cargoes for BIPORT. Sarawak state’s takeover of the Bintulu Port Authority (BPA) could hasten Bintulu Port’s tariff hikes. Kenanga Investment has raised its FY25F net profit forecast by 14% and lifted the TP by 6% to RM5.90 but maintains its MARKET PERFORM call.
KIBB said it came away from a recent engagement with BIPORT feeling upbeat on its prospects. Key takeaways includes on the10% revenue from handling of green energy by 2028. BIPORT has set itself a target of 10% of total revenue coming from the handling of green energy by 2028, with the balance from LNG (40%) and non- LNG (50%). At present, its revenue mix is 50:50 LNG and non-LNG.
Sarawak state’s investment in two large-scale hydrogen plants in Bintulu, namely, H2biscus and H2ornbill, pursuant to its hydrogen economy agenda, will produce green energy cargoes to BIPORT such as green hydrocarbon, ammonia & methanol as well as blue ammonia. In addition, BIPORT will also handle biomass fuels produced in the hinterland. In the meantime, it will benefit from the handling of construction materials for the hydrogen plants.
Stronger prospects for port tariff hikes. BIPORT appeared more upbeat on the prospects of Bintulu Port’s tariff hikes. This follows Sarawak state’s plan to take over the BPA. KIBB said it understands that the takeover could be completed as soon as June 2024, paving the way for a 10% hike in Bintulu Port’s tariffs by FY25, based on our prediction. Kenanga also said it understands that Sarawak state has its own development master plan for all ports in Sarawak, with the key focus being on enhancing shipping connectivity with other major global transportation and logistics hubs.
Recall, there has not been any revision to Bintulu Port’s tariffs since. Currently, Bintulu Port’s container tariff is 38% lower than that of Samalaju Industrial Port. It currently charges RM207.50 per twenty- foot equivalent unit (TEU) for local containers, vs. RM335/TEU charged by Samalaju Industrial Port. We expect a potential step-up in earnings if Bintulu Port is granted a significant hike in its port tariffs.
Currently, Bintulu Port operates under an interim lease agreement until Dec 2024. Separately, the recent talks on the potential resumption of Malaysia-South Korea free trade agreement covering digital economy, green economy and supply chain could potentially also benefit BIPORT as South Korea is one of the largest importers of Malaysian LNG via BIPORT.
The house predicts tariff hikes of up to 40% in total to be staggered over a 30-year concession period.
