Malaysia's Mah Sing among Nomura top picks in Asean

PETALING JAYA: Property developers Mah Sing Group Bhd and Thailand’s Quality Houses (QH) are Nomura Research’s Asean property yield picks that are expected to offer above-average yields and dividend growth in 2015 and 2016. 

In a report on Asean property, it identified three out of the 28 property stocks, including 11 real estate investment trusts (Reits), that it covered which fulfilled two conditions. 

The conditions are that the stock’s 2015 forecast dividend yields would be higher than the market’s as well as the sovereign 10-year bond yield, and that the dividend per share (DPS) or unit (DPU) is projected to grow faster than the market in 2015 and 2016 forecasts.

It said that the report “aims to identify candidates amongst property stocks under our coverage in Asean for income-focused investors that are still looking for dividend yield ideas.”

Setting a RM3 target price for Mah Sing with a “buy” call, Nomura said its 2015 forecast yield was 5% versus the KLCI’s 3.6% and Malaysia’s 10-year bond yield of 4.2%. 

Additionally, it said Mah Sing’s forecast DPS for 2015 and 2016 were projected to grow 22.2% and 27.3% respectively, versus the KLCI’s 6.8% and 7.2% respectively.

“The projected growth in dividend is underpinned by unbilled sales of RM4.8bil, which should drive earnings to expand 22% (compound annual growth rate) over financial years 2013 to 2016 forecast,” it said.
As for QH, which has a target price of 4.40 baht and a “buy” call, Nomura said it had a projected 2015 forecast yield of 4.8% versus Stock Exchange of Thailand’s (SET) 3.4% and Thailand’s 10-year yield of 2.8%. 

Its DPS is projected to grow 12.5% and 16.7% in 2015 and 2016 versus the SET’s 11.4% and 12% respectively, underpinned by high earnings visibility due to resilient real demand for landed housing.

Nomura noted that Sunway Reit was its third stock that met the two conditions but retained its “neutral” call as it believed the robust DPU growth forecast in 2015 and 2016 was already largely reflected in the unit price. 

It also noted that none of the Singapore Reits it covered managed to qualify on account of overall pedestrian DPU growth in 2015 and 2016 forecasts (average 1.5% to 1.6%).

Meanwhile, RHB Research downgraded the Malaysian property sector to “neutral”, expecting property transaction volumes to decline 3% to 5% in 2015 on the back of slower economic growth and a high loan rejection rate.
It also anticipated 
property prices to remain flat as developers would have difficulty passing on incremental costs during weakening demand, while all parties would be likely to adopt a wait-and-see stance as the impact of the goods and services tax kicked in. 

“For the stocks under our coverage, we estimate new sales to drop by an average 10% to 20% year-on-year (y-o-y) versus -25% y-o-y in 2014 and +41% y-o-y in 2013,” it said. 

RHB Research maintained “buy” on Tambun Indah Land with a reduced target price of RM2, noting that affordable housing players should fare better while the company’s fundamentals remained solid with zero gearing.

It downgraded Eastern & Oriental, UEM Sunrise and UOA Development to “neutral” with respective target prices of RM2.27, RM1.65 and RM1.84 respectively. 

It downgraded Glomac to “sell” with a lower target price of 88 sen (6.5% downside), as it believed management’s 2015 (April) new sales target of RM504mil was a tall order given new launches would likely be delayed into the first quarter.

KLCI extends loss on external woes

KUALA LUMPUR (April 5): The FBM KLCI extended its loss on Thursday, in line with the weaker overnight close at the US markets as well as lacklustre opening at regional markets.

The 30-stock index fell 3.79 points to 1,595.48 at 9am.

Losers led gainers by 57 to 23, while 86 counters traded unchanged. Volume was 13.1 million shares valued at RM4.09 million.

US stocks fell for a second day on Wednesday as investors contemplated a world without monetary stimulus and a poorly received bond auction in Spain suggested the effects of Europe's funding operations were waning, according to Reuters.

Meanwhile, Global stocks dropped more than 1 percent and gold tumbled to its lowest in nearly three months on Wednesday a day after U.S. central bank meeting minutes dented hopes for more economic stimulus and as a Spanish debt auction drew weak results, it said.

BIMB Securities Research said European stocks fell for a second day yesterday after Spain sold fewer bonds than its maximum target and the Federal Reserve damped expectations of more monetary stimulus for the US. Spain sold €2.6bn (US$3.4bn) of bonds; near the minimum target of €2.5bn; and borrowing costs rose in its first auction since the country said public debt will surge to a record this year.

US stocks ended in negative territory for a second day fueled by disappointment over the Fed's latest minutes and ongoing worries over the euro zone, the research house said in a note April 5.

The Dow and the S&P logged their biggest decline since March 6, while the Nasdaq suffered its worst day of the year. The S&P 500 lost 1 percent to 1,398.96 while DJIA slid 124.8 points to 13,074.75, it said.

“Back home, the local market has retraced as expected where the FBMKLCI fell more than 7 points to 1,599.27; dragged down by financial and PROPERTIES [] sector.

“Net foreign is still positive at RM176.7m yesterday but we reckon market sentiment to be weaker due to profit taking activities coupled with weak share performance in US and Europe. Expect immediate support to be seen at 1,595 followed by 1,590,” it said.

Among the decliners in early trade, KLK fell 22 sen to RM24.38, Genting lost 10 sen to RM10.98, Maybank don nine sen to RM8.79, RHB Capital and Malayan Flour Mills fell four sen each to RM7.70 and RM2, CIMB, MAS, Mah Sing and TDM fell two sen each to RM7.70, RM1.34, RM2.02 and RM4.68 respectively.

Gainers,meanwhile, included Tradewinds, BHIC, Parkson, SEGi, Pos Malaysia, Leader, Proton and N2N.

The actives included JCY, Carotech, Kurasia, Metronic and Winsun.



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Maybank IB Research maintains Hold on Mah Sing

KUALA LUMPUR (March 27): Maybank Investment Bank Research is maintaining its Hold call on MAH SING GROUP BHD []’s latest 4.3-acre land acquisition in Kota Kinabalu given its relatively high pricing.

It said development on the land, with an estimated RM300 million gross development value, is expected to enhance our earnings estimates by 1%-3%.

“Separately, we are concerned on the termination of the RM220 million in enbloc sale (or 96 units) for Icon Residence Mont Kiara(IRMK) due to rising sales risk in the Mont Kiara area.

“All in all, we adjust our earnings by -3% to +1.5%. Our RM1.77 TP is based on a 40% discount to our RM2.95 RNAV,” Maybank Research said.



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Mah Sing in RM830m property project in KK

KUALA LUMPUR (March 26): MAH SING GROUP BHD [] has proposed a commercial property project in Kota Kinabalu’s central business district with a combined gross development value of RM830 million.

It said on Monday its unit Capitol Avenue Development Sdn Bhd had signed a joint development agreement with Paduan Hebat Sdn Bhd to jointly develop a 4.26 acres of prime leaseholde commercial land.

“Under the terms of the agreement, Paduan Hebat agrees with Capitol Avenue to jointly develop the land for an entitlement of RM39 million or approximately RM210 per square foot,” it said.

Mah Sing said Capital Avenue also had the exclusive option to jointly develop with Paduan Hebat another two parcels of adjacent commercial land, measuring 4.408 acres at an entitlement price of RM216.00 per sq foot or RM41.5 million.

It said based on preliminary plans, the proposal was a niche development with an estimated gross development value of approximately RM360 million for the 4.26 acres land and RM470 million for the 4.408 acres option Land.

“Tentatively called Sutera Avenue, the proposed joint development comprises multi-storey shop offices fronting the coastal highway and complemented by street mall retail lots as well as serviced apartments.



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Stocks to watch: Silver Bird, MAS, Proton, Ekovest

KUALA LUMPUR (March 1): Blue chips could extend their gains on Thursday, as regional market sentiment would receive the boost after the European Central Bank provided 530 billion euros (US$711 billion) of cheap funding for banks.

The ECB's Long Term Refinancing Operation (LTRO) has been a major factor behind the rally in European equities since the turn of the year.

A total of 800 banks borrowed money at the tender, the second round of three-year funds, with demand exceeding the 500 billion euros expected by traders polled by Reuters.

At Bursa Malaysia, the FBM KLCI was up 12.92 points or 0.83% to close at 1,569.65, its highest since July 2011.

However, the losses from MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) and PROTON HOLDINGS BHD [], which were expected by the market, could have some impact.

SILVER BIRD GROUP BHD [], which resumes trading on Thursday, cautioned investors in the trading of its securities after the auditors have expressed a disclaimer opinion on the company’s latest audited accounts for the financial year ended Oct 31, 2011.

Silver Bird Group suspended its group managing director, Datuk Tan Han Kook and two other key executives effective Feb 24 as it undertakes an internal inquiry into allegations of irregularities in the company’s accounts.

Meanwhile, MAS posted net losses totaling RM1.277 billion in the fourth quarter ended Dec 31, 2011 versus net profit of RM225.92 million a year ago as it severely affected by high fuel costs and non-fuel expenses.

Proton posted heavier net losses of RM88.20 million in the third quarter ended Dec 31, 2011 compared with the net loss of RM60.10 million a year ago due to a decline in year-end sales.

Other stocks to watch are SIME DARBY BHD [], KENCANA PETROLEUM BHD [], MAH SING GROUP BHD [], and EKOVEST BHD [].

Sime Darby reported net profit of RM1.10 billion in the second quarter ended Dec 31, 2011. For the first half, it reported a 42% increase in net profit to RM2.175 billion from RM1.531 billion in the previous corresponding period.

Kencana Petroleum Bhd has secured a RM74 million contract from ExxonMobil Exploration and Production Malaysia (EMEPMI) to fabricate the substructure for a platform off Terengganu.

Mah Sing Group Bhd expanded its land bank with the latest acquisition of 157 acres (63.4 ha) in Bandar Kundang, Gombak for RM40.94 million about RM6 per sq ft. It proposed to build a self-contained, secured lifestyle township named M Residence 2@Rawang with a gross development value of about RM650 million.

Ekovest's earnings soared 615.82% to RM11.31 million for its second quarter ended Dec 31, 2011, from RM1.58 million a year ago, due to increased revenue from its CONSTRUCTION [] arm.

Malaysia Steel Works (KL) Bhd posted net losses of RM13.33 million in the fourth quarter ended Dec 31, 2011 compared with net profit of RM8.99 million a year ago. For the financial year ended Dec 31, 2011, it was still profitable, with net profit of RM24.53 million, or down 12.6% to RM24.53 million from RM28.09 million in FY10.

Poultry-based TEO SENG CAPITAL BHD [] posted a 12.95% increase in its profits to RM7.15 million for the third quarter ended Dec 31, 2011, from RM6.33 million a year ago, underpinned by larger sales of eggs and better prices.



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Mah Sing buys 157 acres of land in Gombak, plans projects with RM650 GDV

KUALA LUMPUR (Feb 29): MAH SING GROUP BHD [] expanded its land bank with the latest acquisition of 157 acres (63.4 ha) in Bandar Kundang, Gombak for RM40.94 million about RM6 per sq ft.

It said on Wednesday the land was one km south of the group’s project, M Residence@Rawang -- a 226 acre township development acquired in October last year.

Mah Sing proposed to build a self-contained, secured lifestyle township named M Residence 2@Rawang with a gross development value of about RM650 million.

“Based on preliminary plans, the township shall comprise mainly linked semi-detached homes to capture the spillover demands for such products from M Residence. The group intends to replicate the success of Aman Perdana township in Meru-Shah Alam by offering semi-detachedhomes at link house pricing,” it said.

Mah Sing said its units Major Land Development Sdn Bhd and Elite Park Development Sdn Bhd had on Wednesday signed separate sale and purchase agreements with Vibrant Domain Sdn Bhd and Topaz Best Sdn Bhd to acquire the adjacent parcels of land.



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Stocks to watch: IPPs, Mah Sing, Genting, UEM Land

KUALA LUMPUR (Feb 29): With the current corporate results drawing to an end on Wednesday, investors’ focus would be on the companies with the stronger set of financial results and their prospects for the year ahead as the external and domestic economies slow down.

The important decision would be to pick companies which would be able to ride through slower growth, especially PLANTATION []s and banks with overseas operations.

Among the stocks to watch on Wednesday after independent power producers (IPPs), MAH SING GROUP BHD [], GENTING BHD [] and UEM Land Bhd.

The Energy Commission has invited the first generation of independent power producers to submit their plans to extend the power purchase agreements (PPAs).

These IPPs, whose PPAs were scheduled to end in three to four years, were invited to extend the agreements on condition they would reduce the capacity payments.

Mah Sing Group Bhd posted net profit of RM41.03 million in the fourth quarter ended Dec 31, 2011, up 30.8% from RM31.35 million a year ago, boosted by the property segment.

Its revenue increased by 41% to RM422.12 million from RM299.28 million. Earnings per share were 4.93 sen compared with 3.77 sen. It announced dividend of 11 sen a share.

For FY11, its earnings rose 42.7% to RM168.55 million from RM118.07 million in FY10.

Genting Bhd reported net profit of RM772.91 million in the fourth quarter ended Dec 31, 2011, up 66% from RM465.43 million a year ago.

Its revenue increased by 23.9% to RM5.06 billion from RM4.08 billion. Its earnings per share were 20.94 sen compared with 12.57 sen while it proposed a dividend of 4.5 sen a share.

Group profit before tax was RM1.802 billion, compared with RM1.182 billion a year ago as it included a reversal of RM308.6 million in respect of previously recognised impairment loss relating to the UK casino licenses and a net fair value gain of RM64.4 million on derivative financial instruments.

UEM LAND HOLDINGS BHD [] posted a 3.84% increase in earnings to RM140.56 million for the fourth quarter ended Dec 31, 2011, from RM135.36 million, due to improved performance from the group's various development activities.

It said the board was confident of the group’s prospects in the coming financial year as the on-going projects had unbilled sales of RM1.85 billion as at Dec 31, 2011.

Shareholders of TSM GLOBAL BHD [], who own 28.07% of the paid-up share shares, have offered to acquire all the business, including assets and liabilities, for RM159.24 million or RM1.25 per share.

Property developer, Dijaya Corp Bhd's earnings rose 12.8% to RM39.02 million for the fourth quarter ended Dec 31, 2011, from RM34.59 million a year ago, due to better sales performance and recognition of progress billings from its project launches in 2011.

Revenue was up 53.2% to RM156.19 million from RM101.91 million. Earnings per share were 8.53 sen compared to 7.60 sen a year ago.

KFC Holdings Bhd (KFCH) saw its fourth quarter earnings decline 21.9% to RM38 million from RM48.67 million a year ago.

It said KFC India and KFCH International College continued to incur high initial start-up costs in the current quarter during the gestation period.

QSR BRANDS BHD [] reported net profit of RM38.69 million in the fourth quarter ended Dec 31, 2011, up 9.7% from the RM35.25 million a year ago due to better profits from Pizza Hut Malaysia.

Cafe chain operator Oldtown Bhd recorded RM11.66 million in profits for the fourth quarter ended Dec 31, 2011 as it benefited from an increase in exports of its beverage products and higher selling prices.

Steel contractor Eversendai Corporation Bhd recorded profits of RM36.42 million for the fourth quarter ended Dec 31, 2011, due to higher revenue from current on-going projects. Its revenue was RM313.29 million while earnings per share were 5.41 sen.

For the financial year ended Dec 31, 2011, revenue was RM1.03 billion, while profits were RM119.45 million.

Benalec Holdings Bhd, posted a 52.51% increase in earnings to RM28.84 million for the second quarter ended Dec 31, 2011, from RM18.91 million due to net gain on sale of land in the current quarter.

Its revenue was 40.54% lower to RM26.89 million from RM45.22 million mainly due to certain projects located in Melaka had already reached the completion stage.

RHB CAPITAL BHD [] posted an 8.09% fall in profits to RM348.39 million for the fourth quarter ended Dec 31, 2011, from RM380.15 million due to increased competition among banks.



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Mah Sing Group 4Q earnings up 30.8% to RM41m, record FY11

KUALA LUMPUR (Feb 28): MAH SING GROUP BHD [] posted net profit of RM41.03 million in the fourth quarter ended Dec 31, 2011, up 30.8% from RM31.35 million a year ago, boosted by the property segment.

It announced on Tuesday that its revenue increased by 41% to RM422.12 million from RM299.28 million. Earnings per share were 4.93 sen compared with 3.77 sen. It announced dividend of 11 sen a share.

For FY11, its earnings rose 42.7% to RM168.55 million from RM118.07 million in FY10 while revenue increased by 41.5% to RM1.570 billion from RM1.110 billion.

“The group delivered a solid performance in 2011 with new record highs for revenue, profit and sales. Revenue at RM1.6 billion and net profit at RM168.6 million represents 41% and 43% y-o-y growth compared to the previous year. Property sales were robust in 2011 at RM2.26 billion, more than a 46% improvement from the RM1.5 billion achieved in 2010,” it said.

Mah Sing also said despite expanded operations, balance sheets remain strong, with high cash pile at RM665.7 million and net gearing at a low of 0.29 as at Dec 31, 2011. It added the return on equity (ROE) at 16% and asset turnover at 55% were at their highest annual levels since 2007.

“It said that revenue from property segment improved 48% on-year to RM1.4 billion. The group's property sales exceeded internal target of RM2 billion to end at RM2.26 billion. Well located projects coupled with a reputation for delivering high quality PROPERTIES [] that meet contemporary demand helped boost sales,” it said.



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Chor: Local property mkt to see slight impact from eurozone downturn

KUALA LUMPUR (Jan 17): Housing and Local Government Minister Datuk Seri Chor Chee Heung is confident that the local property development will continue to thrive despite the economic slowdown that has currently impacted European countries.

He said the crisis would have a slight impact only on PROPERTIES [] that exceed RM1 million.

He said the property development in the country was mainly driven by local buyers and hoped that developers would build more affordable houses for Malaysians in conjunction with the government's 1 Malaysia policy.

"For developers undertaking affordable housing of between RM400,000 and RM600,000, there will be no shortage of takers," he told reporters after launching the "Malaysia Top Property Developers 2011/2012" coffee table book.

The 250-page coffee table book is available at MPH bookstores and some will be on sale in overseas markets.

The book focuses on the 36 top developers in Malaysia, among others, IJM LAND BERHAD [], Berjaya Land Berhad and Mah Sing Group Berhad.

Chor said his ministry would revive about 35 more abandoned housing projects throughout the country after having successfully done so with 35 others last year.

Meanwhile, the Chief Executive Officer of Malaysia Property Incorporated, Kumar Tharmalingam said Malaysia's property market, was different from that of Singapore.

"(In Malaysia) 98 per cent of the properties are sold to Malaysians and only two per cent to foreigners. This is in contrast with the Singapore property market that is targeting 30 per cent of sales to foreigners," he added.

He said Malaysian builders had very deep pockets and were able to manage the economic slowdown in sales by holding back launches while having had also paid for the land.

He predicted that this year the country would see less luxury projects launched, with the exception of established markets such as Iskandar Malaysia in Johor, the Klang Valley, Kota Kinabalu (Sabah) and Batu Ferringhi (Penang).

These he added, are foreign market oriented. - Bernama



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KLCI extends loss as renewed eurozone worries weigh on global markets

KUALA LUMPUR (Jan 4): The FBM KLCI reversed its earlier gains and extended its losses on Wednesday as key regional markets retreated on renewed concerns over the eurozone debt crisis.

The FBM KLCI fell 9.32 points to 1,504.22, down from its intra-day high of 1,525.14.

Losers overtook gainers by 404 to 387, while 318 counters traded unchanged. Volume was 1.66 billion shares valued at RM1.53 billion.

Asian shares closed mixed, while European shares broke a four-session rally on Wednesday as concerns over the euro zone's huge refinancing needs lead investors to cash in on recent gains, according to Reuters.

Banking stocks, many of which are heavily exposed to euro zone debt, fell 0.9% ahead of a German debt auction later in the session, it said.

At the regional markets, the Shanghai Composite Index fell 1.37% to 2,169.39, Hong Kong’s Hang Seng Index lost 0.80% to 18,727.31, and South Korea’s Kospi was down 0.49% to 1,866.22.

Meanwhile, Japan’s Nikkei 225 rose 1.24% to 8,560.11, Taiwan’s Taiex up 0.42% to 7,082.97 and Singapore’s Straits Times Index added 0.84% to 2,711.02.

On Bursa Malaysia, Petronas Dagangan lost 44 sen to RM17, Y&G down 24.5 sen to 75.5 sen, HLFG shed 22 sen to RM11.52, APM 20 sen to RM4.30, Mah Sing and UEM Land lost 15 sen each to RM1.95 and RM2.23, CIMB 14 sen to RM7.10, Ibraco 13 sen to RM1.23 and GAB fell 12 sen to RM13.22.

Among the gainers, Dutch Lady gained 58 sen to RM24, KLK 50 sen to RM23.50, Batu Kawan 48 sen to RM17.98, BAT 36 sen to RM49.80, BHIC 23 sen to RM3.85, Allianz 18 sen to RM4.94, Lafarge Malayan Cement 16 sen to RM7.14, Shell 15 sen to RM9.30 while MISC gained 13 sen to RM5.73.

The actives included HWGB, JCY, Hibiscus, Astral Supreme, Maxbiz and Nextnation.



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KL shares close lower

Shares of the following companies had unusual moves in Malaysia trading. Stock symbols are in parentheses and prices are as of the close in Kuala Lumpur.

The FTSE Bursa Malaysia KLCI Index fell 0.6 per cent to 1,504.22, its second day of declines.

Plantation stocks: Kuala Lumpur Kepong Bhd gained 2.2 per cent to RM23.50, a record close. IJM Plantations Bhd advanced 3.9 per cent to RM2.96, its highest close since April 29. Kulim Malaysia Bhd climbed 2.3 per cent to RM4.42, a record.

The March-delivery palm oil contract advanced 1.6 per cent to RM3,225 per metric ton on the Malaysia Derivatives Exchange yesterday, the highest close since Nov. 18. It traded at RM3,220 at 5:08 p.m. today.

Property stocks: Mah Sing Group Bhd lost 7.1 per cent to RM1.95, the most since Sept. 13. UEM Land Holdings Bhd slid 6.3 per cent to RM2.23, its steepest decline since Sept. 26.

Malaysia’s property industry was downgraded to “trading buy” from “overweight” by CIMB Group Holdings Bhd, which cited concerns economic growth will slow this year. UEM Land was cut to “neutral” and Mah Sing was downgraded to “trading buy,” CIMB analyst Terence Wong wrote in a report.

YTL Power International Bhd, a power producer, added 1.1 per cent to RM1.85, its highest close since Dec. 8. UBS AG upgraded the stock to “neutral” from “sell” following a 29 per cent drop in its share price since November 2010, Nicole Goh, an analyst at UBS, wrote in a report. She also raised the stock’s price estimate to RM1.90 from RM1.75. -- Bloomberg




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UEM Land, Mah Sing fall on CIMB

UEM Land Holdings Bhd and Mah Sing Group Bhd fell in Kuala Lumpur trading after CIMB Group Holdings Bhd downgraded Malaysia’s property industry on concern economic growth will slow this year.

UEM Land dropped 4.2 per cent to RM2.28 at 3:32 p.m. local time, set for its steepest decline since Nov. 1. Mah Sing lost 5.7 per cent to RM1.98, bound for its largest drop since Sept. 26. UEM Land was cut to “neutral” from “trading buy” and Mah Sing was downgraded to “trading buy” from “outperform,” CIMB said in a report. -- Bloomberg




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Mah Sing call warrants actively traded, shares up

KUALA LUMPUR (Dec 30): MAH SING GROUP BHD []’s call warrants surged in active trade on Friday, accounting for 41 million units transacted.

At 3.36pm, Mah Sing-CE was up one sen to 2.5 sen with 23.269 million units done while Mah Sing-CB jumped 4.0 sen to 7.5 sen with 20.76 million units transacted.

The mother share rose 12 sen to RM2.10 with 4.13 million shares done.

The FBM KLCI was up 8.32 points to 1,515.01. There were 905.45 million shares done valued at RM747.86 million. There were 398 gainers, 315 losers and 323 stocks unchanged.

Its managing director Tan Sri Leong Hoy Kum said in an interview with The Edge Financial Daily that the property group, after securing more than RM2 billion in sales for 2011, targets a sales target of RM2.5 billion for 2012.

“We are optimistic that we can continue our strong sales momentum as our products cater to market needs and are well sited in strategic locations,” he said.

“We shall create our market by tapping the pent-up demand of selected sectors and would include new phases in existing projects like Icon City (Petaling Jaya), M City (Jalan Ampang), Icon Residence Mont’ Kiara, Kinrara Residence (Puchong), Garden Residence (Cyberjaya) and Garden Plaza (Cyberjaya), as well as new projects like M Residence@Rawang, all located in the Klang Valley,” he said.



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Mah Sing caters to market needs

TEFD: What are your expectations for 2012, for your company and the property sector?
Leong: Having achieved more than RM2 billion in sales for 2011, we want to continue the momentum and have set a sales target of RM2.5 billion for 2012.

We are optimistic that we can continue our strong sales momentum as our products cater to market needs and are well sited in strategic locations.

Furthermore, we offer products with good concepts in strategic locations, and with our complete range of properties, we can meet buyers’ needs on many levels and for multiple purposes.With 36 landed residential, high-rise, commercial and industrial developments in our stable, we have a property to meet every need.

As for the property sector outlook, property investments have proven to be a reliable asset class. The key drivers that will continue to sustain and drive this sector will be our young population base, new household formation, high saving rates, low unemployment market and strong economic growth.

Looking at individual segments of the property market, products below RM1 million should do well, and demand should be maintained at the same momentum for products above RM1 million if they are in good locations.

We see continued demand for landed residential properties in good locations, especially in gated and guarded schemes. We also believe that smaller units of serviced apartments which are affordable, yet meet the buyers’ needs will be in demand.

For the commercial segment, smaller SoHo and SoVo properties will continue to be popular due to the affordable price points and the lack of such supply in selected locations, especially in integrated development projects.

Besides location, buyers will focus on the design concept, security, lifestyle, environment, community, amenities and accessibility when acquiring a property.

What impact, if any, do you expect from the euro crisis?

Should the European crisis be prolonged, sentiment may be affected and we are all hoping for a soft landing. At the moment, Malaysia is still projecting a minimum 5% growth in GDP this year and 5% to 6% for next year.

The property market in Malaysia is mainly driven by domestic consumption. For Mah Sing, most of our buyers are locals who are buying for own stay and investment, not speculation.

Thus, there will continue to be demand for these products. These are serious buyers who will still go for properties in good locations and concepts by branded developers.

Judging from our recent preview of M Residence@Rawang, the take-up is still good for products that meet market needs. Over one single weekend, 228 units of link homes valued at RM102 million were taken up in this new township.

These were beginner homes priced from RM360,800 to approximately RM500,000 and meet the current need for quality housing at an accessible entry level.

Will BNM’s recent tightening of consumer borrowings have an impact?

Historically, the tightening of consumer borrowings or an increase in interest rates (if any) does not have a significant correlation with property purchases.

Leong says 2011 has been a very good year for Mah Sing.

In Malaysia, property demand is mainly driven by two things — job security and sentiment.

On a fundamental level, our young population base, new household formation and high saving rates will continue to drive demand for properties. Furthermore, property has always been seen as a good hedge against inflation.

So we look at these two things. In terms of job security, our unemployment is very low, only 3%, and people generally have job security.

We believe that at this juncture, it is more on sentiment, and branded developers offering products that meet market needs in good locations will still see good take-up rates. Developers need to be sensitive to market demand to prevent any mismatch in demand and supply when planning their launches.

What is the company’s plans and focus for 2012?
We hope to achieve another bumper year in 2012, and will focus on launching projects that meet market needs and expectations to support our sales target of RM2.5 billion.

We shall create our market by tapping the pent-up demand of selected sectors and would include new phases in existing projects like Icon City (Petaling Jaya), M City (Jalan Ampang), Icon Residence Mont’ Kiara, Kinrara Residence (Puchong), Garden Residence (Cyberjaya) and Garden Plaza (Cyberjaya), as well as new projects like M Residence@Rawang, all located in the Klang Valley.

Having done very well with iParc@Bukit Jelutong, which was recently named the Best International Industrial Development, we intend to roll out Mah Sing iParc@Iskandar with the same concept in Johor Baru. We will also continue marketing our Sierra Perdana, Sri Pulai Perdana and Austin Perdana (Austin Suites serviced residences) in Johor Baru.

As for Penang island, purchasers can look forward to the maiden previews or launches of Southbay Plaza @Southbay City, Icon Residence Penang and Ferringhi Residence, as well as select units from the Legenda@Southbay bungalow project.

We will continue to be very market-driven, and ride on our branding and expertise to offer niche products which are of good design and value. We shall also focus on and enhance the development appeal of our projects for greater returns to the group and buyers of our properties.

So far, we have met and exceeded market expectations in both sales and financial performance. 2011 was a very good year for us, and we look forward to an even better year in 2012. We have very strong earnings visibility, with unbilled sales of approximately RM2.14 billion as at Sept 30. This is more than twice the revenue we recognised from property development for the whole financial year 2010.

We will also look out for more good landbank even though our unbilled locked-in sales and remaining GDV is estimated at more than RM15 billion and should last the group for five to seven years. We are keen on both privately held land as well as government land that will be developed by the private sector, so that we can continue to enjoy longer term momentum and sustainable growth.

What is your personal wish list for 2012?
I look forward to the smooth implementation of the MRT, Greater KL and other infrastructure projects which are expected to have high impacts. These are expected to have strong impact in terms of economic growth, job creation, improving the standard of living and increase the income level of our people. These initiatives will attract foreign direct investments, expand our growth and increase purchasing power as well as improve our infrastructure and accessibility. All these could potentially improve property values further.

After a rather turbulent year of natural disasters, it is my fervent hope that 2012 will be a calmer and prosperous year for everyone.


The 2012 CEO Outlook series started on Dec 19 and will run every day into January next year. The Edge Financial Daily has so far interviewed Geoffrey Briscoe of BMW Malaysia, Tan Sri Teh Hong Piow of Public Bank Bhd, Jeffrey Chew of OCBC Bank (M) Bhd, Osman Morad of Standard Chartered Bank Malaysia Bhd, Yvonne Chia of Hong Leong Bank Bhd, Tan Sri Lee Oi Hian of Kuala Lumpur Kepong Bhd and Datuk Kelvin Tan of TSH Resources Bhd.


This article appeared in The Edge Financial Daily, December 29, 2011.



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Residential property mart seen 'encouraging'

The residential property market is expected to remain rather encouraging next year as consumers start to focus on affordable homes.

OSK Research Sdn Bhd said the fact that most of recent launches were of units in the high-end segment could signal that the upcycle is at its tail-end and developers were rushing to capture any remaining upside before the sentiment for such properties turns sour.

"Subsequently, we expect developers to shift to the more affordable mass-market housing segment to tap into the high demand by first-time young buyers," it said in a research note today.

The shift became more apparent recently when high-end developers such as SP Setia and Mah Sing acquired sizeable pieces of land in the Klang Valley for developing townships that offered affordable housing.

"For those which remain focused on the high-end market, we see them offering smaller housing units with the aim of making the price per unit appear more affordable," it said.

OSK maintained a "neutral" call on the property sector, on the fact that property counters tend to underperform or market perform when sentiments weaken. -- Bernama



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Mah Sing takes legal action to stop sale of Jln Tun Razak land

KUALA LUMPUR (Dec 27): MAH SING GROUP BHD []’s unit has taken legal action to stop Asie Sdn Bhd and Usaha Nusantara Sdn Bhd from transacting in the 4.08 acres of land along Jalan Tun Razak following a dispute in the joint venture agreement (JVA).

Mah Sing said on Tuesday Grand Pavilion Development Sdn had filed a summons in chamber in the High Cout of Malaya to seek an interlocutory injunction over the land, known as Parcel K.

The legal action was to restrain Asie and Usaha Nusantara from transferring, assigning, selling, parting, disposing and/or dealing with the leasehold land.

“The plaintiff also seeks to restrain the defendants from granting to any party other than the plaintiff any right to deal with and/or develop Parcel K,” it said.

To recap, The Edge Financial Daily reported on Dec 14 that Mah Sing was informed by Asie that the JVA for the development of a tract of land has lapsed following the failure to meet an outstanding condition.

It said that Asie and its subsidiary Usaha Nusantara Sdn Bhd, through their solicitors, have taken the position that the JVA has lapsed and was of no effect from Dec 2, 2011.

However, Mah Sing maintained the JVA had not lapsed and issued a letter to Asie and Nusantara’s solicitors maintaining this position.

A deposit comprising 10% of the total cash payment payable to Nusantara, amounting to RM6.4 million with interest, was refunded to Mah Sing. However, Mah Sing returned the money, saying it was unable to accept the refund.

According to a previous announcement to Bursa, Grand Pavilion, Mah Sing’s wholly-owned unit and representative in the JVA, is entitled to proceed with the agreement by waiving any of the conditions if they are not fulfilled within the entitlement period.

The disagreement comes after both parties mutually agreed to extend the original deadline by a month and waive four out of five of the conditions in the JVA.

The remaining condition is the receipt by Grand Pavilion of the original issue documents of the title to the JV land with Nusantara endorsed as the legal and registered owner or an alternative arrangement accepted by Grand Pavilion.

Mah Sing announced in August it had secured the land, which formerly housed the Pekeliling flats, to develop a project called M Sentral that had a potential gross development value (GDV) of RM900 million.



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Mah Sing’s M Residence@ Rawang gets 80% take up for Phase 1

KUALA LUMPUR (Dec 16): MAH SING GROUP BHD []’s Phase 1 of its new 226-acre township, M Residence@ Rawang saw an 80% take-up rate in a single day on Friday when the company previewed the project for priority registrants.

In a statement Friday, the company said the township, which has an estimated gross development value of RM948 million had drawn 2,500 registrants since the land was acquired in October 2011.

It said PROPERTIES [] in Phase 1 comprising 214 units of 18’x70’ link homes with built up of approximately 1,650sq.ft were indicatively priced from RM360,800.

Meanwhile, Mah Sing said Phase 2 of the project comprising 233 units 22’x80’ superlink homes priced from RM558,800 would be opened for bookings on Dec 17 and 18 (Saturday and Sunday) at the sales gallery opposite Jaya Jusco in Rawang, it said.

Mah Sing chief operating officer James Bryuns said M Residence@Rawang meets the current need for quality housing at accessible entry level.

“We believe that Phase 2 shall see equally strong interest as we are offering semi-detached layouts in our superlink homes, at link home pricing,” he said.

He said the 22 footers in M Residence@Rawang have an expansive layout boasting 3 bedrooms with en-suites on the first floor, whilst the ground floor houses the living room, dry and wet kitchen, a guest room, bathroom and powder room, adding they also came with a 10ft yard area at the back.

M Residence@Rawang is 5km away from the matured townships of Anggun 1&2@Kota Emerald and 8km from Emerald East and West.

Mah Sing said besides Rawang town itself, the project had a large target market catchment from Kuala Lumpur, Petaling Jaya, Shah Alam, Bukit Jelutong, Subang Jaya, USJ, Kepong and Selayang who are looking for an affordable alternative in a well connected location.

Furthermore, there are large catchments of upgraders from Batu Arang, Kundang, Kuang, Sungai Buloh, in search of new township schemes offering a lifestyle concept, it said.

Bukit Badong Forest Reserve is located next to M Residence@Rawang and extensive green reserves namely Templer’s Park, Kanching Forest Park and Commonwealth Forest Park are all within the radius of 15km of the project, it said.



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Mah Sing’s JV development of Pekeliling stalled

KUALA LUMPUR: Mah Sing Bhd has been informed by Asie Sdn Bhd that the joint venture agreement (JVA) for the development of a tract of land in Jalan Tun Razak has lapsed following the failure to meet an outstanding condition.

The property developer announced to Bursa Malaysia that Asie and its subsidiary Usaha Nusantara Sdn Bhd, through their solicitors, have taken the position that the JVA has lapsed and is of no effect from Dec 2, 2011.

However, Mah Sing views it differently. “Mah Sing takes a different position and maintains that the JVA has not lapsed. Mah Sing’s solicitors have today [yesterday] issued a letter to Asie and Nusantara’s solicitors maintaining this position,” the company told Bursa Malaysia in the same announcement.

A deposit comprising 10% of the total cash payment payable to Nusantara, amounting to RM6.4 million with interest, was refunded to Mah Sing. However, Mah Sing returned the money, saying it was unable to accept the refund.

“Mah Sing has exercised its rights as provided in the JVA to waive the condition precedents and proceed with the transaction. We shall make further announcements when more details are available,” a company official told The Edge Financial Daily.

According to a previous announcement to Bursa, Grand Pavilion, Mah Sing’s wholly-owned unit and representative in the JVA, is entitled to proceed with the agreement by waiving any of the conditions if they are not fulfilled within the entitlement period.

The disagreement comes after both parties mutually agreed to extend the original deadline by a month and waive four out of five of the conditions in the JVA.

The remaining condition is the receipt by Grand Pavilion of the original issue documents of the title to the JV land with Nusantara endorsed as the legal and registered owner or an alternative arrangement accepted by Grand Pavilion.

Mah Sing announced in August it had secured the land, which formerly housed the Pekeliling flats, to develop a project called M Sentral that had a potential gross development value (GDV) of RM900 million.

Based on the preliminary plans, M Sentral involved “flexible-sized and more affordable serviced residences” catering for executives and expatriates, in addition to a few retail units.
Under the JVA, Mah Sing has to fork out RM106.6 million, of which 60% or RM63.96 million in cash and the remaining 40% through the issuance of shares in Grand Pavillion to Nusantara.

By paying RM63.69 million cash, Mah Sing will have an effective 60% stake in the prime piece of land in the city centre. This works out to about RM600 per sq ft (psf), which many see as a very low price considering land in the city is valued at above RM1,000 psf.

Industry observers said that a point of contention may be the price of the land, which appears to be quite low given that land is getting scarce in Kuala Lumpur. The net book value of the land was not disclosed as Mah Sing was not privy to the information.

Recent land transactions in the KLCC vicinity have been upwards of RM2,000, excluding the Lai Ming school land situated in Jalan Ampang which was sold to Magna Prima Bhd at about RM1,500 psf.

An earlier deal, which failed to pan out between UDA Holdings Bhd and Nadayu Properties Bhd, had priced land in Jalan Sultan Ismail at RM1,400 psf.
Asie was granted concession rights and approvals for a mixed development on 24ha, under the largest privatised urban regeneration project in KL with an estimated GDV of RM9 billion.

“The potential for this JV is good because of the 24ha size of the whole development. We will be able to tap that opportunity. And this land is one of the last few sizable land parcels in Kuala Lumpur,” said Tan Sri Leong Hoy Kum, Mah Sing group managing director and chief executive, in August.

The cancellation of M Sentral would have little effect on Mah Sing, though possessing land in such a coveted location would have been good for the company in the longer term. The company, however, has a solid stable of ongoing projects and valuable landbank.

With 36 projects in its current portfolio, Mah Sing has more than RM15 billion in unbilled locked-in sales and remaining GDV.

As at mid-November, it had sales exceeding RM2 billion, its sales target for the full year.



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Stocks to watch: DRB-Hicom, Proton, GoldIS, Faber, Mah Sing

KUALA LUMPUR (Dec 13): DRB-HICOM BHD [] and PROTON HOLDINGS BHD [] would continue to be in focus on Wednesday amid the heavy newsflow despite analysts’ caution that DRB-Hicom’s takeover of Proton might not add value.

The latest development was Proton adviser, Tun Dr Mahathir Mohamad that the buyer of Khazanah Nasional Bhd's 42.7% stake in the national car maker might have to inject maybe another RM2 billion more.

Dr Mahathir, the prime mover behind the national car project, said at the moment, Proton cannot make progress, introduce new vehicles and all that, because of shortage of funds.

The call warrants of Proton and DRB-Hicom were very actively traded on Tuesday on expectations of DRB-Hicom’s purchase of the Khazanah stake.

Other counters which could see trading interest are GOLDIS BHD [], FABER GROUP BHD [], MAH SING GROUP BHD [], RAMUNIA HOLDINGS BHD [].

GoldIS’s net profit for the third quarter ended Oct 31, 2011 surged to RM237.4 million from RM11 million a year earlier, due mainly to the gain on disposal of a subsidiary amounting to RM221.2 million. Revenue for the quarter rose 49.7% to RM75.82 million from RM50.64 million in 2010.

It declared a gross second interim dividend of half a sen and 9.50 sen single tier per ordinary share, to be paid Jan 18, 2012.

As for Faber, Al Femah Contracting and Transporting Establishment is seeking RM13.10 million in claims from Faber Group Bhd’s subsidiary and Projek Penyelenggaraan Lebuhraya Bhd (Propel).

Faber said its subsidiary Faber Limited Liability Company (Faber LLC) had received a summons and statement of claim from Al Femah in the UAE.

Ramunia posted net profit of RM112,000 in the fourth quarter ended Oct 31, 2011 compared with RM30.36 million when there was a one-time writeback from a previously concluded scheme of arrangement. Its revenue was RM15.67 million compared with only RM992,000 a year ago. Its earnings per share were 0.02 sen compared with 4.91 sen.

For the financial year ended Oct 31, 2011, its net profit plunged to RM4.66 million from RM65.78 million in the previous financial year. Its revenue fell 45.6% to RM18.95 million from RM34.86 million.

Mah Sing Group Bhd has disputed with the joint venture partners for the proposed development of a piece of prime land along Jalan Tun Razak here and had maintained the agreement is valid.

Mah Sing said on Tuesday the two parties -- Asie Sdn Bhd and Usaha Nusantara Sdn Bhd -- had claimed the joint venture agreement (JVA) for the development of the 4.08 acres site had lapsed “and is of no effect from Dec 2, 2011” as the conditions were not met.

“Mah Sing however, takes a different position and maintains that the JVA has not lapsed,” it said, referring to its Dec 6 announcement that it waived the conditions in the Aug 2 announcement.

S P Setia Bhd’s request for more time to fulfill the conditions in its purchase of 1,010.5 acres of land in Ulu Langat, Selangor for RM330.13 million was rejected by the vendor Ban Guan Hin Realty Sdn Bhd.

S P Setia said Ban Guan Hin Realty did not agree to an extension of the period to fulfill the conditions, including securing the Estate Land Board’s approval for the sale and transfer of the land to the purchaser.



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Mah Sing disputes with JV partners over Jln Tun Razak project

KUALA LUMPUR (Dec 13): MAH SING GROUP BHD [] has disputed with the joint venture partners for the proposed development of a piece of prime land along Jalan Tun Razak here and is maintaining that the agreement is valid.

Mah Sing said on Tuesday the two parties -- Asie Sdn Bhd and Usaha Nusantara Sdn Bhd -- had claimed the joint venture agreement (JVA) for the development of the 4.08 acres site had lapsed “and is of no effect from Dec 2, 2011” as the conditions were not met.

“Mah Sing however, takes a different position and maintains that the JVA has not lapsed,” it said, referring to its Dec 6 announcement that it waived the conditions in the Aug 2 announcement.

“Mah Sing’s solicitors have today issued a letter to Asie’s and Usaha Nusantara’s solicitors inter alia maintaining this position,” it said.

It added that its solicitors also returned the RM6.44 million deposit, with interest earned, to Asie and Usaha Nusantara, as it was unable to accept the refund of the deposit.



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