KUALA LUMPUR: Mah Sing Group Bhd’s net profit jumped by 40.3% to RM40.28mil in the first quarter ended March 31,2021 from RM28.71mil a year ago underpinned by strong revenue growth due to strong demand for its affordable property units in strategic locations.
It announced on Monday its profit before tax surged by 35.1% to RM56.16mil on the back of its revenue of RM413.31mil in 1Q compared with profit before tax of RM41.61mil and revenue of RM371.11mil a year ago. Its earnings per share were 1.66 sen compared with 0.42 sen.
“The group also achieved property sales of approximately RM650.5mil for the first five months of 2021 as at end May 2021, while locking in RM400mil for 1Q, ” it said.
Mah Sing said this was driven by the strong demand for affordable product offerings in strategic locations. Coupled with the continuous effort of the group in adopting digital marketing, Mah Sing is well-positioned to meet its 2021 sales target of RM1.6bil.
“In addition, Mah Sing also continues to maintain its healthy balance sheet with cash and bank balances and investment in short-term funds of approximately RM901.2mil as at March 31,2021.
“With disciplined financial management and a healthy balance sheet, the group will continue with its selective land banking strategy for continuous growth, with Greater Kuala Lumpur and Klang Valley being the focus areas, ” it said.
In 1QFY21, its property development recorded higher revenue of RM311mil as compared to RM281.3mil a year ago while operating profit was RM61mil as compared to RM39.2mil a year ago.
“Both revenue and operating profit for the current quarter were higher mainly driven by progressive revenue recognition from ongoing construction progress for the group’s existing projects coupled with the recognition of cost savings from the finalisation of certain construction contracts, ” it said.
Mah Sing said the development projects which mainly contributed to the group's results include M Vertica in Cheras, M Centura in Sentul and Meridin East in Johor. Other projects which also contributed include M Oscar in Off Kuchai Lama, M Aruna in Rawang, M Arisa in Sentul, M Luna in Kepong, M Adora in Wangsa Melawati, Southville City in Bangi, Ferringhi Residence and Southbay City in Penang, Sierra Perdana, Meridin @ Medini and Mah Sing i-Parc in Johor.
As for its plastics segment, it also saw improved financial performance with revenue of RM91.3mil and operating profit of RM5.1mil.
A year ago, its revenue was RM76.1mil and operating profit RM3.3mil a year ago. mainly due to the imposition of the Movement Control Order (MCO) in March 2020.
“Mah Sing has set a sales target of RM1.6bil for 2021 with 91% of products priced below RM700,000, and 51% below RM500,000.
“The group extended its sales momentum and have achieved new property sales of approximately RM650.5mil sales in the first five months, after locking in property sales of approximately RM400mi for the first quarter ended March 31,2021.
“The group is cautiously optimistic that its property projects will continue to attract buyer interest mainly due to their strategic locations, affordable price points coupled with attractive packages, innovative design and layout, ” it said.
Mah Sing’s other planned new launches for 2021 include Tower E of M Vertica, Cheras, remaining phases of M Arisa, Sentul, Phase 2 of Cerrado Suites and Tower B Sensory Residences at Southville City in Bangi, Phase 3 of M Aruna and M Panora in Rawang, service apartments in Southbay City, Penang and double storey link homes in Meridin East, Johor Bahru.
Meanwhile, its new glove manufacturing business under Mah Sing Healthcare Sdn Bhd has received its business licence and other relevant licences/permits, and commenced operation recently at its first glove manufacturing factory in Kapar Klang, with the first shipment of gloves to be delivered in May/June 2021.
“This new milestone places Mah Sing amongst the first few new glove entrants in Malaysia to commence glove production to meet immediate market demand, ” it said.
Mah Sing also said the group has remaining landbank of 2,050 acres with remaining gross development value and unbilled sales totalling approximately RM24.95bil which can provide earnings visibility for at least eight years.
Mah Sing’s founder and group managing director Tan Sri Leong Hoy Kum said, “With our quick turnaround and nimble business model, we are able to quickly adapt to the changing market conditions, whilst aligning our business strategies with the latest trends in the market.
“We are confident that both the new land acquisitions will receive favourable response during its upcoming launch as it meets the current needs of home buyers and aligns well with the group’s current strategy of focusing on affordable high-rises in the central business district areas and affordable landed homes in the outskirts/suburban areas.”
“Meanwhile, with the government imposing MCO 2.0, MCO 3.0 this year including the latest round of a full two-week lockdown beginning June 1,2021 to curb the spread of Covid-19, this is anticipated to impact the recovery progress of the local economy including for the property sector.
“While the three-phase nationwide lockdown is expected to be difficult for many businesses, we will be well-prepared in shifting from the traditional way of doing things and ramping up our digitalisation efforts to remote working and work from home (WFH).
“We also hope that the government would continue to step up the mass vaccination process nationwide towards achieving the herd immunity soonest possible and urged Malaysians to support in getting themselves vaccinated.”