Mah Sing Group Berhad presented its Group strategy, financial updates, key projects updates and the property industry’s macro outlook during a press briefing at the 11th Invest Malaysia 2015 (IMKL) here.
The group emerged as the biggest listed property developer by domestic sales value in Malaysia in 2014, charting a record of RM3.43 billion in total sales volume, which represents a 14% growth compared to the previous year.
Mah Sing is confident to replicate the achievement and has set a sales target of at least RM3.43billion with its strategy to provides affordable homes to the mass market segment. The group will be focusing on projects in the Klang Valley.
A total of RM761million in sales is achieved as at 22nd April 2015 despite the shorter working Q1 due to the festive season. Mah Sing believed it product mix at the right locations and attractive pricing will be the key to achieve their 2015 sales target.
Greater KL and Klang Valley are expected to contribute 67% to sales this year, with Johor expected to contribute 20% followed by Penang at 11% and Sabah at 2% sales. The 48 projects (11 completed) that spread across the states are sited in property hotspots, consisting of residential projects, industrial projects and commercial projects such as lifestyle shops, retail shops, gourmet street shops and offices.
Keeping with its strategy of providing affordable homes to the mass market segment, 84% of the Group’s planned residential launches in 2015 will be priced below RM1million, with 71% priced below RM700,000 and 44% priced below RM500,000.
The Group will also continue to focus on the demand from Malaysians aged 39 years and below, which form the target market segment of Mah Sing. This relatively young segment of Malaysians represents approximately 70% of the current 30 million population which will create new household formations and drive demand for new homes. This is especially so in the Klang Valley as more Malaysians flock to the city seeking employment and career development opportunities.
Klang Valley remains a focal point for the Group as statistics have shown an exponential population growth rate at 34% from the year 2000 to 2013 compared to Malaysia’s total population growth rate of 27%. There are an estimated 7 million people currently in the Klang Valley, and this number is expected to increase to 10 million by the year 2020.
As of 31st December 2014, Mah Sing’s unbilled sales position stood at approximately RM5.3billion, which is equivalent to 2 times the revenue recognised from the property division in 2014.
The five-year (2009-2014) revenue compound annual growth rate (CAGR) was recorded at 36% and profit after tax (PAT) CAGR at 28%. In addition, Mah Sing’s equity base produced a high return on equity (ROE) of a five-year average (2009-2014) of 15%, which is higher than the industry average of 9% – 10%.
Mah Sing’s bank balances amounting to RM1.4 billion has placed the group in a strong position with a healthy balance sheet to continue with its growth and expansion plans. The group’s zero net gearing position also indicates their ample liquidity and well-managed cash reserves.
MAH SING’S INDUSTRY MACRO OUTLOOK – UNDERLYING DEMAND REMAINS STRONG
Property remains the preferred wealth preservation and investment option in Malaysia, supported by healthy GDP growth, household income growth, young demography and stable employment conditions.
Bank Negara’s Annual Report 2014 reported Malaysia as among the fasted growing economies in Asia, recording a stronger real GDP growth of 6% in 2014. This trajectory of growth is also expected to remain on a steady course of 4.5% – 5.5% in 2015.
Supported by this climate of stability, Mah Sing opines that demand will continue to outstrip supply. According to the National Property Information Centre (NAPIC)’s latest report, only 70,000 to 90,000 units of new homes are completed each year, while more than 200,000 units of new properties are required annually to meet household formations arising from new marriages. There is still a large supply-demand gap as supply growth for properties has been on a decreasing trend since 2003, with Malaysia’s supply growth in 2014 at only 2.3% according to NAPIC.
In addition, current low unemployment rates of approximately 3% and rising urbanisation in major states such as Kuala Lumpur, Penang, Johor and Sabah are key drivers which will see healthy demand for the right property products in the right locations. Current attractive mortgage rates from financial institutions at approximately 4.45% have also created a more conducive interest rate environment compared to historical levels of close to double digit in certain years.
Recent and Upcoming Project Launches in 2015
Greater KL & Klang Valley
- Savanna Executive Suites@ Southville City – Block 7 of Savanna Executive Suites launched in March 2015 with built-ups from 956 sq ft onwards. Plans underway for targeted launch of final block of Savanna Executive Suites in 2015.
- Lakeville Residence in Taman Wahyu, KL – Plans underway for new phase launch of 2 blocks of residential suites in 2H15 with built-ups from 978sq ft onwards.
- D’sara Sentral, Sungai Buloh – 2nd block of serviced residences launched in March 2015 with built-ups from 809 sq ft onwards, with plans for the launch of its 3rd and 4th block of serviced residences this year.
- M Residence @ Rawang – Targeted phase launch of 56 units of 2 1⁄2-storey canal link homes with an estimated built-up of 3,168 sq ft in a gated community in 2H 2015.
- M Residence 3@Rawang – Plans in place for 2-storey link homes, 2-storey Semi-Ds and 2-storey shops. First phase of 2-storey link homes targeted for 2H 2015 preview.
- Festival Lakecity, Puchong – Plans in place for preview of its Executive Suites in 2H15.
- Seremban Township Land – Plans in the pipeline for preview of link homes in the recently acquired Seremban Township land, featuring link homes with estimated built-ups of 1,170sq ft and 1,400sq ft.
- Ferringhi Residence 2 – Previews of first block of Ferringhi Residence 2 resort condominiums anticipated in 1H15, with units ranging from a built-up area of 1,197sq ft – 2,875sq ft in a gated and guarded community.
- Southbay City – High-rise residential development slated for preview in Southbay City in 2H15, with built-ups indicatively ranging from 530sq ft to 1,20 sq ft.
- Iskandar Malaysia, Johor Bahru Bandar Meridin East – Expected preview of gated double-storey link homes by 1H15, with a lot size of 1,170sq ft.
- Sutera Avenue – Expected launch of the second block of its 100-units serviced residences in May 2015 with built-ups measuring 726 sq ft – 1,220 sq ft.