KUALA LUMPUR (April 23): Hong Leong Investment Bank (HLIB) has a “trading buy” rating on SDS Group Bhd. The research house said that with 33 of its food and beverage (F&B) outlets situated across Johor and a wholesale segment that is focusing in this region, SDS appears strategically positioned to leverage the burgeoning vibrancy in Johor, propelled further by the continuous influx of visitors from Singapore.

In a technical tracker on Tuesday, HLIB said this trend is supported by high-impact initiatives such as the Johor-Singapore Special Economic Zone and the special financial zone in Forest City.

It said Johor is primed for accelerated growth, potentially outpacing other Malaysian states.

HLIB said that given the promising sales outlook in Johor state, the group intends to expand its retail footprint (targeting three to five new stores per year), particularly targeting urban areas in the central and southern regions of Peninsular Malaysia.

The research house said this strategic move aims to capitalise on the influx of Singaporean shoppers and Malaysian residents who commute to Singapore, particularly those residing in Johor Bahru.

“This strategy has already been set in motion, as evidenced by the opening of three new retail outlets in FY2023, all located within Johor state.

“SDS is presently trading within its strong support region of 75 sen (MA100)-78 sen, with indicators showing uptick bias.

“A successful breakout above 80 sen will spur the share price towards 82 sen-86 sen-92 sen. Cut loss at 69 sen,” it said.