Mah Sing to focus on affordable homes, on track for RM1.1b sales target

by NUR HAZIQAH A MALEK / pic credit:

MAH Sing Group Bhd plans to launch more affordable projects to gain traction from buyers.

In a filing to the stock exchange yesterday, the company noted that the reintroduction of the Home Ownership Campaign and other property-friendly measures under the short-term National Economic Recovery Plan stimulus package, as well as the low interest-rate environment, are positive for the property market.

The property company posted a lower net profit of RM27 million for the third quarter ended Sept 30, 2020 (3Q20), compared to RM50 million recorded in the same period last year.

Its revenue for the quarter was also down at RM388 million compared to RM415 million posted last year due to the lingering impact of Movement Control Order when site progress of all projects came to a halt for nearly two months.

“The strict lending environment also affected sales conversion which weighed on revenue recognition,” said Mah Sing in the Bursa filing.

The group achieved property sales of RM847.1 million for the period, which is 77% of its sales target of RM1.1 billion for the year.

MD Tan Sri Leong Hoy Kum said the group is confident in achieving its sales target by the end of the financial year.

“The group should also benefit from the five years’ stamp duty waiver for properties priced below RM500,000 for first homebuyers as introduced in Budget 2021,” he said in a statement yesterday.

The group’s balance sheet stands at RM1.13 billion in cash and bank balances as well as investment in short-term funds, while its remaining landbank has 1,996 acres (807.75 ha) with remaining gross development value and unbilled sales totalling RM24.34 billion as of Sept 30, 2020.

The group’s Mah Sing Healthcare Sdn Bhd is currently making progress to start glove production in April 2021 as the installation of the initial lines has already begun at the completed part of the factory.

“The first six production lines are expected to be ready for operation as early as the 2Q21, followed by another six production lines expected to be ready by 3Q21.

“These 12 production lines are Phase 1 of Mah Sing’s proposed diversification into gloves and have a maximum production capacity of up to 3.68 billion pieces of gloves per annum,” he said.

Mah Sing expects the glove manufacturing business to be able to generate sales for the group as it is expected to begin operation with six production lines as early as 2Q21.

For the year-to-date period, its net profit records YoY decrease from RM155.35 million to RM72.26 million, while its revenue decreased YoY from RM1.35 million to RM1.06 million.

Moving forward, the group plans to launch more projects in the affordable segment such as Carya in M Aruna, Rawang, and Acacia link homes in Meridin East, Johor, for the rest of the year, driven by the emphasis on digital marketing efforts to reach out to interested homebuyers.