KUALA LUMPUR: Mah Sing Group Bhd is on track to achieve its property sales target of RM1.1bil after recording sales of about RM847.10mil at end-September.
In a statement issued on Monday, it said it had managed to achieve 77% of the sales target despite the challenging business and operating conditions following the impact of Covid-19 pandemic this year.
Mah Sing said the target was withing reach due to several new launches in the fourth quarter, together with the recently launched affordably priced homes such as M Luna in Kepong and M Adora in Wangsa Melawati.
Mah Sing plans to launch more projects in the affordable segment such as Carya in M Aruna, Rawang and Acacia link homes in Meridin East, Johor, in the remainder of 2020.
This will be driven by further emphasis on digital marketing efforts to reach out for interested home buyers.
Mah Sing’s founder and group managing director, Tan Sri Leong Hoy Kum said his confidence in achieving the RM1.1bil target by year-end was due to the reintroduction of the Home Ownership Campaign.
He also cited other property-friendly measures under the PENJANA stimulus package as well as the low interest rate environment are positive for the property market.
“The group should also benefit from the five years stamp duty waiver for properties priced below RM500,000 for first homebuyers as introduced in the Budget 2021, ” he said.
Mah Sing’s balance sheet remains healthy with cash and bank balances and investment in short-term funds of about RM1.13bil, while the group has remaining landbank of 1,996 acres with remaining gross development value and unbilled sales totalling RM24.34 billion as at Sept 30.
“Backed by the group’s disciplined financial management and healthy balance sheet, Mah Sing will continue exploring selective land banking for continuous growth.
“At the same time, Mah Sing’s entry into proposed gloves manufacturing via Mah Sing Healthcare is making strides to meet the targeted production date of April 2021 and to cater for the pent-up demand for gloves, ” Leong said.
The first six production lines are expected to be ready for operation as early as the second quarter of next, followed by another six production lines expected to be ready by the third quarter.
These 12 production lines are Phase 1 of Mah Sing’s proposed diversification into gloves and has a maximum production capacity of up to 3.68 billion pieces of gloves per annum.
Mah Sing’s profit before tax of RM40.50mil in the third quarter ended Sept 20 was higher as compared to 2Q in RM22.4mil mainly due to the resumption of operations with adherence to the necessary standard operating procedures during the Recovery MCO in current quarter.
Its 3Q revenue of RM388.2mil was also higher as compared to 2Q’s RM298.6mil.
For the nine-month period ended Sept 30, the Group posted profit before tax of RM106mil on the back of revenue of RM1.1bil.
Revenue from property development was RM811.9mil while operating profit was RM107.60mil.
Mah Sing said the nine months under review were affected by the lingering impact of Movement Control Order (MCO) when site progress of all projects came to a halt for nearly two months and Conditional MCO where level of activities on sites were generally lower due to adoption of strict standard operating procedures in compliance with regulatory requirements. The strict lending environment also affected sales conversion which weighed on revenue recognition.
In addition, contribution from matured projects like Lakeville Residence were lower as they were completed and handed over during the current period while new projects such as M Oscar, M Arisa, M Luna and M Adora are at initial stages of completion which results in minimal progressive billings for these projects.
The development projects which contributed mainly to the Group's results include M Vertica in Cheras, M Centura in Sentul, Southville City in KL South, Meridin East in Johor and Lakeville Residence in Jalan Kuching. Other projects which also contributed include M Oscar in Off Kuchai Lama, M Aruna in Rawang, M Luna in Kepong, Ferringhi Residence and Southbay City in Penang, Sierra Perdana, Meridin @ Medini and Mah Sing i-Parc in Johor.
For the plastics segment, it recorded revenue of RM204.7mil and operating profit of RM8.4mil in the current period.
On the outlook, Mah Sing said since early this year, the group had collaborated with Maybank Islamic to offer HouzKEY, an alternative financing solution under the “Eazy to Own” campaign for selected Mah Sing projects.
Leong said Mah Sing remains focused and is positive that its property projects will continue to gain traction from buyers.
“This is mainly driven by its projects that are located in strategic locations and offering the right products that are at affordable price points in line with market demand, ” he said.
Did you find this article insightful?
100% readers found this article insightful