Mah Sing Increases Sales Target To Minimum Rm1.6billion For Fy2020; Launches ‘Eazy To Own’ Campaign Targeting First-Time Homebuyers
Kuala Lumpur, 2019 – Mah Sing Group Berhad (Mah Sing) successfully achieved its target sales of RM1.5billion for the financial year ended 31 December 2019 driven by strong take-up of its affordable homes for the mass market.
The Group has set a minimum sales target of approximately RM1.6billion for 2020 with 84% of target sales from residential properties below RM700,000. Concurrently, in line with the Group’s tagline, ‘Reinvent Spaces. Enhance Life,’ Mah Sing recently launched the ‘Eazy to Own’ campaign, an initiative targeted at first-time homebuyers offering easy entry with low upfront costs and affordability with great incentives and savings for homebuyers.
With a healthy balance sheet, Mah Sing is also in a good position to continue to pursue more landbanking activities should opportunities arise, whilst exploring joint venture prospects. As at 31 December 2019, Mah Sing has healthy cash and bank balances of approximately RM1billion.
Mah Sing Sees Positive earnings contribution in FY2019, records approximately RM270million profit before tax
The Group recorded profit before tax of approximately RM270million and revenue of approximately RM1.8billion for the year ended 31 December 2019. On a quarterly basis, the Group recorded profit before tax of approximately RM58million and revenue of approximately RM443million, for the fourth quarter ended 31 December 2019.
On the property development front, revenue was approximately RM1.4billion, whilst operating profit was approximately RM254.6million, for the year ended 31 December 2019. This is mainly attributed to a higher proportion of new sales secured from new projects where contribution to revenue is expected to increase upon completion of the initial stages of construction. Higher revenue and profit contributions are expected from these projects when construction momentum starts to increase.
The development projects which contributed mainly to the Group’s results include 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 projects, which also contributed, include D’sara Sentral in Sungai Buloh, M Aruna in Rawang, Ferringhi Residence in Penang, Meridin @ Medini and Mah Sing i-Parc in Johor.
The plastics segment continued to contribute positively to the Group’s performance. Revenue grew by 7.6% to approximately RM327million and operating profit was approximately RM20million for the year ended 31 December 2019.
Riding On 2019’s Strong Take Up Of Affordable Homes, Mah Sing Sets 84% of 2020 Minimum RM1.6billion Sales Target on Products Priced below RM700,000
Mah Sing achieved its 2019 sales target of RM1.5billion driven by its strategy in developing fit-for-purpose products that are affordably priced and located at strategic locations with good accessibility and connectivity.
Mah Sing’s Founder and Group Managing Director, Tan Sri Dato’ Sri Leong Hoy Kum, said, “Majority of the total residential sales achieved for 2019 were from products priced below RM700,000, which serves as an impetus for us to continue to tap into this segment. Our quality product offerings are also seeing rising interest 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.”
“We have set a minimum RM1.6billion sales target this year, with 84% of targeted residential sales priced below RM700,000. 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. 2020 is going to be another exciting year for Mah Sing, as our upcoming launches will still be in the affordable segment. In view of the rising appetite for mass market housing, we are confident to achieve our minimum RM1.6billion target sales this year,” Tan Sri Dato’ Sri Leong Hoy Kum elaborated.
Healthy Cash & Bank Balances of approximately RM1billion – Good Position to Source for Landbanking and Joint Venture Opportunities
Adhering to prudent and disciplined financial management, Mah Sing’s cash and bank balances remains healthy at approximately RM1billion as at 31 December 2019.
Tan Sri Dato’ Sri Leong Hoy Kum said, “We intend to leverage on our healthy cash and bank balances of approximately RM1billion as at 31 December 2019 to source for new, strategically located landbanks that fits our business model, whist exploring any joint venture opportunities.”
Hopes Stimulus Measures for Property Market
The newly introduced RM20billion stimulus package is expected to stimulate economic growth and boost business sentiment. This in turn will spur improved consumer confidence that is a key factor in property purchase. The Group is looking forward for more property-friendly incentives to encourage home ownership.
Tan Sri Dato’ Sri Leong Hoy Kum said, “The property market has a multiplier effect on more than 140 industries and is very much reliant on domestic consumption. Thus, the rolling out of the Stimulus Package is timely, as it will spur improved consumer confidence, which is a key factor in property purchase. The move to reduce the Employee Provident Fund’s minimum contribution rate by 4% from 11% to 7% is commendable, as it will potentially unlock up to RM10 billion worth of private consumption and will enable consumers to have more spending power. This includes spending on purchase of a property particularly in the affordable, which ties in well with our newly launched ‘Eazy to Own’ campaign.
“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, which we appreciate for our Ramada by Wyndham Meridin hotel and Star Avenue shopping mall. Additionally, we laud the government’s move to further aid the tourism sector with the 6% 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,” Tan Sri Dato’ Sri Leong Hoy Kum elaborated.
“We hope 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. We are also hopeful for the continuation of the Home Ownership Campaign or an introduction of a new scheme with more incentives such as higher margin of financing, tax relief and lower interest rate for first-time buyers, reinstate maximum loan tenure to 45 years, as well as allowing other income sources for loan applications,” Tan Sri Dato’ Sri Leong Hoy Kum elaborated.
Remaining GDV & unbilled sales of approximately RM25billion to support long-term growth
With disciplined financial management and a healthy balance sheet, the Group is in a good position to continue to pursue more landbanking activities whist exploring any joint venture opportunities. As at 31 December 2019, the Group has remaining landbank of 2,049 acres with remaining gross development value and unbilled sales totalling approximately RM25billion, providing earnings visibility for at least 8 years.
Dividend Payout of Minimum of 40%
Mah Sing is continuing its track record of rewarding shareholders and proposes a final dividend of 3.35sen per ordinary share for the financial year ended 31 December 2019, subject to shareholders’ approval in the upcoming Annual General Meeting.
Mah Sing has been consistent in paying dividend rates of at least 40% of net profit over the last 14 years, upholding its commitment to reward shareholders while maintaining a prudent and disciplined approach for long-term sustainable growth.
Mah Sing Launches ‘Eazy to Own’ Campaign
Mah Sing launched its ‘Eazy to Own’ sales campaign covering the Group’s new and completed residential projects nationwide. The campaign, which commenced on 19 February 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.
The ‘Eazy to Own’ campaign has been crafted to address the needs of 4 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
This younger cohort are within the 25-40 year age group and they work in urban centers, but reside in suburbs due to affordability issues.
People who are currently renting
This is a varied demographic straddling lower income workers and highly mobile professionals, and trends towards the younger cohort between 25 to 35 years old.
People who face difficulties in getting their loans approved
This will target mainly the M40 segments, mainly aged between 30 to 45 years old.
First time home buyers
Millennial centric, urbane and educated with individual incomes of RM8,000 and below.
2020 Launches Continue to Focus on Affordable Homes at Strategic Locations; 84% of Residential Sales Target Priced Below RM700,000
The Group’s launches in 2020 with an estimated GDV of RM2.1billion include:
- M Arisa, Sentul (high-rise residential, indicatively priced from RM299,000)
- M Luna, Kepong (high-rise residential, indicatively priced from RM385,000)
- M Adora, Wangsa Melawati (high-rise condominium, indicatively priced from RM468,000)
- M Vertica, Cheras Tower D (high-rise residential, indicatively starting price from RM480,000)
- Carya @ M Aruna, Rawang (2-storey link homes, Indicatively starting price from RM550,000)
- M Panora, Rawang (2-storey link homes, Indicatively starting price from RM597,000)
- M Aruna Phase 3, Rawang (2-storey link homes, indicatively starting price from RM575,000)
- Sensory Residence Tower B, Southville City, KL South (high-rise residential, indicatively starting price from RM463,000)
- Cerrado Suites Phase 2, Southville City, KL South (high-rise residential, indicatively starting price from RM405,000)
- Ferringhi Residence 2 Block A & C (New phase of the Ferringhi Residence 2, a resort-styled condominium)
- Acacia in Meridin East, Pasir Gudang (2-storey link homes, indicatively priced from RM 498,000)
- Jasmine 1, 1A (1) in Meridin East, Pasir Gudang (2-storey link homes, indicatively priced from RM520,000)
- Jasmine 3, 1C (1) in Merdin East, Pasir Gudang (2-storey link homes, indicatively priced RM500,000)
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