Our verdict on why Tanco Holdings is worth RM15 billion in valuation

Tanco Holdings Berhad (short of “Tanco”), listed on Bursa Malaysia with a market cap of MYR 3.26 billion as of October 2024, is expected to reach a MYR 15 billion (USD 3.17 billion, 4.73 MYR/USD) valuation ahead. This projection centers on its smart AI container port in Port Dickson, Negeri Sembilan, complemented by its property and pharmaceutical segments.

Tanco’s 79%-owned subsidiary, Midports Holdings Sdn. Bhd., is developing a smart AI container port along the Straits of Malacca. Key details:

• Location and Capacity: Situated on a 480-acre seafront site with 21-meter deep-water access, 1.8 km offshore. Initial capacity projected at 1 million TEUs annually, scalable to 7 million TEUs by 2035.
• Cost: Estimated at MYR 2 billion (USD 423 million), per 2024 media reports (e.g., The Malay Mail).
• Approvals: Ministry of Transport approval, Malaysia Marine Department clearance JV with MBINS Ventures Sdn. Bhd. formed October 2024.
• Technology: AI-driven automation for container handling, logistics, and maintenance, targeting a 40% EBITDA margin.

Revenue and Valuation:

• At USD 150/TEU, 1 million TEUs yield MYR 709.5 million (USD 150 million) in annual revenue initially, with EBITDA of MYR 284 million (USD 60 million) at 40%.
• At 7 million TEUs, revenue reaches MYR 4.97 billion (USD 1.05 billion), with EBITDA of MYR 1.99 billion (USD 420 million).
• Applying a 7.5x industry average EBITDA multiple, the port’s valuation hits MYR 14.93 billion (USD 3.16 billion) soon.
• Land value at book value, without any revaluation (480 acres at MYR 200,000/acre) adds MYR 96 million (USD 20 million), totalling MYR 15 billion.

Key Assumptions

The projection assumes port completion by 2027, scaling to 7 million TEUs upon commencement, with a base TEU fees stable at USD 150 and a 40% margin from AI efficiencies. It also assumes no major delays or cost overruns beyond MYR 2 billion and sufficient regional trade growth to support capacity targets.

Conclusion

Tanco’s MYR 15 billion valuation depends on the port’s operational success, delivering MYR 14.93 billion, with property and pharmaceuticals covering the balance. The 7.5x multiple aligns with industry norms (global port operators: 8–12x), adjusted for execution risk. The Midports listing will clarify financials; until then, MYR 15 billion by 2035 is a data-driven target, assuming Tanco leverages its assets and market position effectively.

In other words, Tanco is trading at steep discount as compared to industry peers.

Disclaimer: This article provides a speculative valuation of Tanco Holdings Berhad based on publicly available data, industry benchmarks, and reasonable assumptions as of March 23, 2025. Projections, including the MYR 15 billion valuation, are subject to risks such as construction delays, cost overruns, market competition, and regulatory changes. Financial estimates are not endorsed by Tanco or its subsidiaries, and actual outcomes may differ materially. Readers should conduct independent research and consult financial advisors before making investment decisions.

$TANCO / 2429 (TANCO HOLDINGS BERHAD)