PETALING JAYA: Analysts believe Paramount Corp Bhd
’s focus on greater capital efficiency and diversified earnings base, combined with disciplined growth in its core property development division, provides firm footing for its expansion targets.
At its results briefing for the fourth quarter of its financial year ended Dec 31, 2025 (4Q25), Paramount shared goals to increase group pre-tax profit by RM100mil to RM150mil by 2030 while raising return on equity to 10% from its current 8.3%.
TA Research said these targets appear achievable, supported by increased sales in its property segment, monetisation of assets, and incremental contributions from its Envictus and the Co-labs platforms.
“Assuming property sales grow at about 10% annually from the financial year 2026 (FY26) forecast of RM1.06bil, sales could reach RM1.5bil to RM1.6bil by 2030, potentially generating RM70mil to RM80mil incremental pre-tax profit assuming margins of around 15%,” it said in a recent note to clients.
The research house said management is currently evaluating potential monetisation of approximately RM900mil of non-core assets that are yielding very low returns of around 1%.
It estimated that the group’s asset recycling strategy could increase profit contribution by RM45mil to RM54mil if redeployed into development projects, generating 6% to 7% returns on capital.
However, it noted that timing of disposals would be dependent on market conditions and availability of suitable buyers.
“As such, realisation of the RM900mil asset pool may occur progressively rather than within a fixed timeline.”
Paramount has also guided for a RM1.2bil property sales target in FY26, implying approximately 20% growth from RM1.03bil in FY25, TA Research said.
Despite holding a more conservative sales forecast of RM1.06bil, the research house notes that the group’s targets are backed by its RM1.1bil of planned launches and RM1.5bil of products from ongoing projects available for sale, as well as continued demand for landed homes and properties in the central region.
It also highlighted the developer’s gross development value (GDV) pipeline, which includes RM4.8bil of existing GDV remaining at end-2025, RM2.9bil of announced land acquisitions pending completion, and a RM2bil GDV replenishment target for 2026.
“Based on management’s FY26 sales target, this pipeline translates into approximately eight years of development visibility, providing a solid runway to support steady medium-term growth.”
TA Research has maintained its “buy” call on the stock with an unchanged target price of RM1.25.
It added that Paramount offers an undemanding valuation, trading at sevem times the forecast calendar year 2027 price-to-earnings ratio, significantly below the developer sector average.
Apex Research similarly made no changes to its “buy” call on Paramount’s stock and target price of RM1.40.
It said the company’s outlook remains constructive, and that its RM1.5bil unbilled sales backlog would provide earnings visibility through FY28.
Additionally, it said the continued expansion of the Envictus F&B network, of which Paramount owns a 28% stake, should gradually broaden the group’s earnings base and bring incremental diversification in the longer term.
However, Apex Research also noted that the group’s co-working division recorded losses in 2025, largely due to expansion and setup costs.
The company plans to expand net lettable area under the segment to 280,000 sq ft by FY26, with two of its five new locations set to cater to enterprise clients.
“We believe the segment’s return to profitability will depend on the pace and efficiency of ramp-up at newly opened locations,” it said.
