PGF Capital’s Tanjung Malim Township Seen Back on Track as Key Infrastructure Issues Near Resolution

TA Securities expects PGF Capital Bhd to finally resolve the long-standing challenges surrounding its Tanjung Malim property development by the financial year ending February 2027, paving the way for the group to return to a clearer growth trajectory.

PGF owns a sizeable land bank near Proton City in Tanjung Malim, earmarked for a large-scale township development spanning more than 400 acres. The long-term project, planned over 10 to 15 years, is expected to deliver over 6,000 residential and commercial units with an estimated gross development value (GDV) of approximately RM3 billion. Such large-scale township concepts mirror demand trends seen in strategic industrial land in Selangor and integrated commercial developments near employment hubs.

According to TA Securities, PGF’s subdued share price performance over the past year has largely been attributed to project delays caused by unresolved water supply issues. These infrastructure constraints have prevented construction from commencing, despite the project’s strong underlying fundamentals. The stock has declined nearly 15% year-on-year, reflecting investor caution amid prolonged uncertainty.

The research house believes a turning point may be near, as PGF is in the process of submitting a comprehensive water concept plan. This proposal would enable Phase 1 of the township to proceed, following a RM5 million to RM6 million investment to complete water piping and final infrastructure requirements. Once addressed, the group can move forward with its housing development submission, which is expected to receive approval within six months.

If approvals are secured as anticipated, PGF’s 50.1%-owned joint venture, Nexel Group, is expected to launch Phase 1 of the project in FY2027, with an estimated GDV of RM300 million. Successful execution would allow PGF to unlock the value of its low-cost land bank, similar to how well-located commercial property in KL and factory developments in Puchong benefit from early land acquisition strategies.

TA Securities highlighted that the Tanjung Malim development is a key earnings driver for PGF, alongside its core glass wool insulation business. A successful launch would allow the group to capitalise on its relatively low land acquisition cost while also recognising available tax credits, supporting stronger margins and improved cash flow.

Based on PGF’s FY2025 accounts, the land is carried at RM168 million, or approximately RM2.94 per square foot — significantly below current indicative market prices of around RM45 per square foot. This valuation gap presents meaningful upside potential once development momentum accelerates. TA Securities estimates that PGF could recognise a land sale gain of about RM21 million upon achieving an 80% take-up rate, which it expects by FY2028.

Meanwhile, PGF’s near-term earnings are expected to remain stable, supported by continued demand for its glass wool insulation products, particularly from Australia. TA Securities forecasts the group’s 3QFY2026 profit to remain broadly in line with the preceding quarter.

The research house maintains a “buy” recommendation on PGF Capital, with a target price of RM2.92. For property investors, the case highlights how infrastructure readiness, land bank strategy, and execution timing remain critical — themes equally relevant to industrial property in the Subang area, office space in Bukit Jalil, and broader commercial and industrial real estate opportunities across Kuala Lumpur and Selangor.