PETALING JAYA: TA Research remains optimistic about Paramount Corp Bhd
’s earnings growth, driven by its strong unbilled sales of RM1.6bil and robust property sales momentum.
“With a sizeable RM3.2bil gross development value (GDV) pipeline for financial year 2025 (FY25), we expect Paramount to achieve record-breaking sales and net profit levels,” the research house added.
In the fourth quarter of 2024 results briefing, Paramount said it is shifting focus towards sustainable, quality growth.
This strategic pivot aims to optimise returns on assets by selectively acquiring land that offers decent margins, rather than pursuing rapid expansion.
The property developer plans to maintain a manageable number of ongoing projects – about 10 to 12 – to prevent quality deterioration and cost overruns associated with overextension.
TA Research, in a research note, stated that Paramount’s management remains optimistic about the property market outlook, noting that supply and demand are still imbalanced, as indicated by the latest National Property Information Centre data.
With a contraction in the supply of residential units since 2019, coupled with expanding demand, there remains room for supply to catch up, potentially driving sales growth for local developers.
In FY25, TA Research stated Paramount targets RM1.5bil in sales, an increase of 8% year-on-year, underpinned by RM1.4bil in new launches and RM1.8bil from ongoing projects carried forward from the previous year.
The new launches would be primarily residential, with high-rise and landed properties making up 62% and 35%, respectively, while commercial developments account for the remaining 3%.
Geographically, 62% of these projects would be in the central region, with the remaining 39% in the northern region.
With annual property sales expected to remain at a minimum of RM1.5bil, Paramount’s remaining GDV of RM5.5bil (excluding Brunsfield Residences, as the acquisition is not yet completed) could be depleted within the next three to four years.
To ensure sustainable earnings, an active landbank management strategy is essential.
This year, Paramount aims to acquire RM400mil worth of land, generating a potential GDV of RM2bil to support new launches over the next five years.
For FY24, Paramount posted a net profit of RM102.45mil, reflecting a basic earnings per share of 16.45 sen.
Its revenue saw a slight increase to RM1.04bil during the year, as compared to RM1.01bil in the previous year.
The company has declared a single-tier third interim dividend of 1.5 sen per share for FY24, which would be paid on March 21, 2025.
The total dividend for the current financial year is 7.5 sen compared to seven sen in the previous corresponding period.
