Tan Sri Leong Hoy Kum

Mah Sing Targets RM1.6 Billion for 2020

Mah Sing Group Bhd says there is rising interest for its product offerings from overseas buyers in view of Malaysia’s attractive unique value proposition as a destination for retirement and education purposes as well as real estate investments business.

The developer plans to launch RM2.1 billion worth of new projects this year, the majority of which are residential developments.

It is also raising its sales target for the financial year ending 31 December 2020 to a minimum of RM1.6 billion, said the founder and group managing director, Tan Sri Leong Hoy Kum.

Leong said he is confident the group will achieve the higher target, on the back of new launches this year catering to all segments of the market.

He said 84 per cent of the targeted sales is expected to be derived from residential properties priced below RM700,000.

“2020 is going to be another exciting year for Mah Sing. In view of the rising appetite for mass market housing, we are confident to achieve our minimum RM1.6 billion target sales this year,” he said.

Last year Mah Sing achieved its target sales of RM1.5 billion, driven by strong take-up of its affordable homes for the mass market.

Mah Sing came up with various marketing campaigns offering easy entry with low upfront costs and affordability with great incentives and savings for homebuyers.

Leong said, Mah Sing developed fit-for-purpose products at affordable prices and located at strategic locations with good accessibility and connectivity.

Earnings Visibility

As at 31 December 2019, Mah Sing has remaining landbank of about 820ha.

Leong said Mah Sing’s remaining gross development value (GDV) and unbilled sales of about RM25 billion will support the group’s long-term growth.

He said with a healthy balance sheet, the group is in a good position to continue to pursue more landbanking activities whist exploring any joint venture opportunities.

“In line with our growth strategy, we will continue to adopt our resilient strategy of quick turnaround business model to acquire prime lands at strategic locations, whilst being nimble and flexible to change,” said Leong.

The current GDV and unbilled sales of about RM25 billion provides earnings visibility for Mah Sing for at least the next eight years, he said.

Mah Sing posted pre-tax profit of about RM270 million and revenue of RM1.8 billion for the fiscal year 2019.

For the fourth quarter ended 31 December 2019, the group recorded pre-tax profit of RM58 million and revenue of RM443 million.

In a filing with Bursa Malaysia, Mah Sing said revenue from its property development division was about RM1.4 billion, whilst operating profit was RM254.6 million for the 12 months ended 2019. Mah Sing attributed this to a higher proportion of sales secured from new projects.

“Contribution to revenue is expected to increase upon completion of the initial stages of construction for the new projects, and when construction momentum starts to increase,” said Leong.

The development projects which led to higher revenue included M Vertica in Cheras, M Centura in Sentul, Southville City in KL South, Lakeville Residence in Jalan Kuching, Meridin East and Sierra Perdana in Johor.

Other developments which also contributed were D’sara Sentral in Sungai Buloh, M Aruna in Rawang, Ferringhi Residence in Penang, Meridin @ Medini and Mah Sing i-Parc in Johor.

Hope for Property Market

Leong expects the RM20 billion stimulus package will stimulate economic growth and boost business sentiment as this in turn, would spur improved consumer confidence.

“Confidence is a key factor in property purchase. We are looking forward for more property-friendly incentives to encourage home ownership,” said Leong.

Leong said the rolling out of the stimulus package is timely.

“The property market has a multiplier effect on more than 140 industries and is very much reliant on domestic consumption. The move to reduce the Employee Provident Fund’s minimum contribution rate by four per cent from 11 per cent to seven percent is commendable, as it will potentially unlock up to RM10 billion worth of private consumption. This in turn, will enable consumers to have more spending power,” said Leong.

Higher spending power could potentially lead to higher property purchasers, he said.

Leong hope that the government can consider more relaxation measures such as speedy implementation for the RM600,000 threshold for foreigners to buy high-rise properties, waiver on the Real Property Gains Tax, and relaxing the current regulation of property sector.

Mah Sing recently launched its ‘Eazy to Own’ campaign to get buyers back into the market, said Leong.

The campaign, which commenced on 19 February covers the group’s new and completed residential projects nationwide. It offers easy entry with low upfront costs and affordability with great incentives and savings for homebuyers that are looking to own their ideal home now.

Leong said the campaign has been crafted to address the needs of four key demographics with specific pain points in their home ownership journey – people with intention of buying, but are unable to afford a high down payment; people who are currently renting; people who face difficulties in getting their loans approved; and, first time home buyers.

Stimulus Package Boost for Hotels and Malls

Leong said the 15% discount in monthly electricity bills for the tourism sector including hotels and shopping malls is a direct injection to ease these businesses’ cash flow.

“We also laud the government’s move to further aid the tourism sector with the six per cent service tax exemption for hotels, the RM100 travel vouchers for Malaysian citizens, along with the personal income tax relief of up to RM1,000 for domestic travel,” he said.

Leong said Mah Sing’s properties like Ramada by Wyndham Meridin hotel at Iskandar Puteri in Johor and Star Avenue shopping mall will directly benefit from this.

Ramada by Wyndham Meridin hotel featuring 644 rooms has the highest room count in South East Asia under the Wyndham Hotels & Resorts. The hotel is operating under a franchise agreement between Mah Sing and Wyndham Hotels & Resorts and is the developer’s first foray into the hospitality sector.

The four-star hotel opened in July 2018 and is the centrepiece of Mah Sing’s development in Meridin@Medini. It is located 700m away from the Legoland theme park, and is close to other attractions like Puteri Harbour and Iskandar Malaysia Studio.