Mah Sing Group Bhd plans to use its cash pile of RM150mil as at Dec 31, 2008 to acquire new land locally and in other regional markets to realise its vision as a regional property player.
President and group chief executive Datuk Seri Leong Hoy Kum said the company was in a good position to make some opportunistic acquisitions to lock in land which had dropped in value following the global financial meltdown.
“In any challenging environment, there are always opportunities to be tapped and with land prices at more reasonable entry levels, our strong balance sheet will enable us to expand our presence and ensure healthy earnings growth,” Leong told StarBiz.
While moving ahead with its plans to become a regional player, he said the company would be prudent in its cashflow management and not over-commit.
“We will weigh all the risks and returns before venturing overseas. We shall be very careful in evaluating any business expansion to ensure we have good investments that will allow the company to chart good growth,” he said.
Mah Sing hopes to finalise its first overseas deal this year and to launch its maiden offshore project next year.
The markets being targeted include Vietnam, China, India and Indonesia.
Locally, the company recently purchased 2.12ha of freehold land in Setapak and 26.8ha in Sri Pulai Perdana 2 in Johor Baru.
In addition to these acquisitions, it has 11 projects in the Klang Valley, four in Johor Baru and one in Penang. The company’s remaining landbank of 231.6ha has an estimated RM3.9bil in remaining gross development value and unbilled sales which will sustain earnings growth for the next five to seven years.
Despite the gloomy market outlook, Leong said Mah Sing’s quick turnaround business model, focusing on niche medium to high-end landed developments, had generated healthy profits and cashflow.
“As we have pre-constructed some of our properties in certain key projects which are locked in at the old construction costs, we are able to continue launching the projects,” he said.
“We will take advantage of some RM282mil worth of pre-constructed products in projects like Aman Perdana, Kemuning Residence and Sierra Perdana, to market completed units at the right pricing.”
Mah Sing’s exposure in the three growth corridors of the Klang Valley, Johor Baru and Penang, coupled with a healthy mix of residential and commercial projects, would ensure good growth sustainability for the company, he said.
On the commercial property front, he said prospects for Grade A office space in the Golden Triangle were still good, thanks to the limited supply and strong occupancy rates of above 95%.
“This bodes well for our Grade A office, The Icon Jalan Tun Razak which will be completed by June. Southgate in Jalan Sungei Besi has also done very well, achieving RM150mil in sales since last March,” Leong said. - By Angie Ng (The Star)
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