KUALA LUMPUR –Mah Sing has been focusing on building affordably priced homes since 2015 and will continue to do in 2018. The Group’s strategy is in the right track as recent survey from NAPIC shows that there is still a demand-supply gap in Malaysia, whereby there were 123,902 new households formed compared to 88,000 new houses completed per year in 2012 to 2017 and according to Property Guru’s recent consumer sentiment survey, 90% of Malaysians still prefer to own a home than rent.
Tan Sri Dato’ Sri Leong said, “Our goal is to reinvent space, enhance life and ultimately enable everyone to own a home. Driven by our goal, we continue to focus on building affordably priced homes as this is what the market is currently looking for. In fact, a recent survey from the Lafarge-EdgeProp MYHOME campaign shows that 79% of Malaysians are looking for homes below RM600,000. This shows that our strategy is in the right direction as 74% of our sales target for 2018 is below RM500,000.”
Confident to exceed RM1.8 billion FY18 target as it achieves RM470 million sales in 1QFY1
Mah Sing Group Berhad secured new property sales of RM470 million in the first quarter ended March 2018 (Q1FY18) and is confident to exceed its sales target of at least RM1.8 billion for the year.
Besides strong sales from new projects M Centura in Cheras and M Vertica in Sentul, the Group recently launched its “Desire campaign” covering 19 projects with completed or soon to be completed homes and commercial spaces nationwide. As these are high rate of works projects which have been fully funded, the sales from this campaign will give rise directly to profit and cash flow of the Group.
Mah Sing’s Group Managing Director Tan Sri Dato’ Sri Leong Hoy Kum commented, “The target market for this campaign are mainly owner-occupiers and investors looking for ready-to-move-in homes as well as workspaces. There is a pent-up demand for completed homes and the Desire campaign provides easy ownership financing packages – flexible financing schemes with a low deposit, affordability – ability to adjust the payment of financial schemes to limit down payment, viewing the actual unit, complimentary renovation consultation, furnishing packages and moving-in services for selected projects. With these attractive features, we are confident that Desire Campaign will further boost the sales of the company to exceed our sales target of RM1.8 billion.”
Q1FY18 net profit at approximately RM64.2 million, in net cash position, vacant possession billings of approximately RM587 million for 2018
Mah Sing’s Q1FY18 net profit came in at approximately RM64.2 million compared with RM90.4 million a year ago. Revenue was at RM584.8 million versus RM723.5 million a year ago. This was partly due to slower progress of work during the festive season coupled with more projects focusing on affordable products and at their initial stages of construction.
Despite global uncertainties and reservations in the domestic market prior to GE14, the Group secured RM470 million new property sales during the quarter. The Group’s current focus is on affordable products to meet market demand. Mah Sing also has a healthy balance sheet and is in net cash position for Q1FY18. It is looking forward to approximately RM587 million in vacant possession billings in 2018, further boosting its cashflow this year.
Successfully acquired 3 pieces of lands in 2017, continue to look out for strategic land banks in Klang Kalley
Last year, the Group successfully acquired 3 lands, whereby 2 of the lands are located in Sentul and Cheras and 1 land is located in Permatang Tinggi, Penang.
Tan Sri Dato’ Sri Leong Hoy Kum said, “With the 3 new land acquisitions together with our existing prime land banks, we are in a better position to meet the market’s demand for affordably priced homes in strategic locations. We will continue to be on a look out for more strategic land banks while adhering to our prudent financial policy of maintaining a healthy net gearing ratio.”
He also added, “With detailed planning and efficient execution in line with our quick turnover strategy, we successfully launched 2 newest affordably priced developments, M Vertica in Cheras and M Centura in Sentul last year. Both projects which mainly target on first-time homebuyers are strategically located near to city centre with plenty of amenities and good connectivity. These factors contributed to the good take up rate of M Vertica (85% taken up) and M Centura (95% taken up) during the projects’ first launch over a weekend.
Moving forward, the Group will continue to look out for strategic land banks with favourable payment terms supported by a healthy balance sheet with net cash position. Mah Sing focuses on increasing its land bank in Klang Valley to 75% from the current 66% in the next 2 to 3 years.
Improving market sentiments, Group continues to push property launches in 2H2018
With the improving current market sentiment, the Group is on the right track to continue its focus on developing affordably priced homes. Medium to long term property outlook is healthy due to strong fundamentals such as young population, healthy GDP growth and continued improvement to public transport systems. Demand will also continue to be strong for property buyers who are buying to own or buying for long-term investment. Property as an investment asset remains one of the safest form of investment and a good hedge against inflation.
According to Bank Negara, Malaysia’s first quarter of 2018 saw a 5.4% growth in Gross Domestic Product (GDP). With the US-China trade war averted, Malaysian Institute of Economic Research (MIER) expects GDP growth to outperform by growing up to 5.9% this year. Furthermore, the Ringgit has strengthened, and oil prices have increased which will positively impact the nation’s revenue and further improve sentiments.
The Group’s launches in 2018 with an estimated GDV of RM2.2 billion include:
- M Vertica, Cheras (high-rise residential, starting from RM450,800)
- M Centura, Sentul (high-rise residential, starting from RM328,000)
- Southville City, KL South
– Sensa serviced residence (price to be announced)
– Cerrado Residential Suites Tower C and D (indicatively priced from RM600psf)
- M Aruna, Rawang (2-storey link homes, indicatively priced from RM550,000)
- First phase of Hazel in Meridin East, Pasir Gudang (2-storey link homes, indicatively priced from RM507,000)
- Parcel 1F (Section 2) in Meridin East, Pasir Gudang (2-storey link homes, indicatively priced from RM450,000)
- Ixora Commercial Centre (retail shops, indicatively priced from RM650,000)
- Tower A and C of Ferringhi Residence 2, Batu Ferringhi (low-rise residential, price to be announced)
- M Parc, Permatang Tinggi (commercial and light industrial, indicative price starting from RM934,000)
- M Vista@Southbay (high-rise residential, starting from RM400,950)