Mah Sing Group Bhd, which is looking to replenish its land bank in new growth areas in the Klang Valley, Johor and Penang, is in advanced negotiations to acquire two parcels of land in the Klang Valley.
The property group also hopes to seal a deal for more than 100 acres on Penang island, which if successful, will be its first development in the northern region.
“We are starting this year on an upbeat note and with optimism of an even better showing as all our six projects go into full swing,” president and group chief executive Datuk Leong Hoy Kum said.
“To stay ahead, Mah Sing will continue to set the trend in creative housing designs and development concepts that mirror current lifestyles,” he told StarBiz in an interview.
Buyers can look forward to more semi-detached houses at link house prices and bungalows at semi-detached house prices, a concept that was well received in the group’s Aman Perdana project.
The medium-sized developer has 616 acres in the Klang Valley and Johor, with a potential gross development value (GDV) of RM1.5bil to be developed over five years. It also has unbilled sales of RM387mil.
Its four ongoing projects are Damansara Legenda and Aman Perdana in the Klang Valley, Austin Perdana in Tebrau and Sri Pulai Perdana in Skudai, Johor.
According to Leong, all the group’s projects are now self-financing.
“The funds from both locked-in and target sales will further strengthen cashflow and will enable us to continue acquiring prime land,” Leong noted.
Last month, Mah Sing announced the purchase of 261 acres in Johor for RM61.5mil, or RM5.41 per sq ft.
Analysts view the purchase positively, noting that it would boost the group’s land bank by 74% to 616 acres and GDV by 51% to RM1.5bil.
“We have raised our net profit forecast for the year ending Dec 31, 2007 by 37% to RM59mil to factor in contribution from the new land bank,” a CIMB research report said.
Mah Sing can look forward to double-digit growth in both revenue and earnings for the years ending Dec 31, 2006 and 2007.
“With the group on the brink of closing two land deals in the Klang Valley, there is scope for earnings upside, particularly for financial year (FY) 2007,” AmResearch said in a report on Mah Sing.
The research house said the key growth driver, going forward, would be Aman Perdana in Klang, which should contribute to earnings until FY 2008.
Hwang-DBS Vickers Research said Mah Sing’s strategy of holding only converted land that could be readily launched had helped to mitigate holding costs.
“It can also promote efficient cash management through fast project turnaround. By focusing on land near mature townships, the take-up rate is faster as there is less competition,” the research house noted.
Leong said with the four ongoing projects and two new ones – Perdana Residence in Selayang and Sierra Perdana in Johor – for launch next year, Mah Sing aimed to achieve sales of RM600mil, up from RM500mil last year.
Through new product offerings and branding initiatives, he said Mah Sing was also working to improve margins.
“Demand for landed residential property is expected to remain resilient. Thus, developers who can innovate with trend-setting lifestyle concept and appealing designs in sought-after locations will enjoy good demand for their products”.
Describing 2005 as “a stellar year for the group in terms of financial performance”, he said Mah Sing had emerged stronger, with sales increasing 64% to RM500mil, in spite of the challenging market and intense competition.
Mah Sing made it to the Forbes Asia Top 10 “Best Under a Billion” listed companies and top 200 public-listed companies in the Asia-Pacific in October last year for its unprecedented growth and high returns to shareholder.
“These recognitions bear testimony to our commitment of becoming a high-return niche premier lifestyle developer, backed by strong branding,” Leong said.
And to do its part for society, the group plans to set up Mah Sing Foundation to help those in need of medical, education and other welfare.Mah Sing to focus on luxury houses