PETALING JAYA: Property developer Paramount Corp Bhd
’s acquisition of three contiguous leasehold parcels of land totalling 19.6ha in Bukit Raja, Selangor for RM113.5mil is seen as leveraging its brand familiarity in a location where the company has existing projects, says TA Research.
The research house, which has maintained a “buy” call on the stock with a target price of RM1.46, said the latest acquisition marks its third for the year, bringing the developer’s gross development value (GDV) pipeline to RM5.04bil.
The acquisition was also in line with the company’s strategy to replenish a cumulative RM6bil of GDV this year and and next year in order to support of launches over the next five years.
“Paramount continues to prioritise land acquisitions near its existing developments to shorten turnaround time and leverage brand familiarity,” the research house said.
The company has built a strong presence in Shah Alam over the past 20 years anchored by the 212ha Kemuning Utama township, 8.1ha Utropolis Glenmarie education metropolis, and 12.1ha Sekitar26 Enterprise commercial development.
“Given the new site’s proximity to existing developments, we expect execution risks to be manageable, with take up prospects supported by Paramount’s established track record and buyer recognition in the Shah Alam corridor,” the research house said.
According to TA Research, Paramount’s management has been willing to tactically stretch gearing for value-accretive opportunities despite gearing already edging above its comfort threshold of 0.75 times following the acquisition of a 28% stake in Singapore-listed Envictus International Holdings Ltd for S$38.3mil.
It has maintained the company’s earnings forecasts for this year till 2027, pending the completion of the acquisition.
“While gearing is expected to rise, we believe earnings visibility and track record-driven take-up prospects justify the investment and support long term shareholder value,” the research house added.
