Mah Sing achieves RM942m new property sales for 1HFY18

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KUALA LUMPUR (Aug 30): Mah Sing Group Bhd, which recorded a net profit of RM77.1 million in its second quarter, has secured new property sales amounting to RM942.1 million in the first half of its financial year 2018 (1HFY18) and is confident of attaining its minimum sales target of RM1.8 billion for the full year.

"Mah Sing aims to ride on positive market sentiments following a record-high consumer confidence level by embarking on various marketing campaigns and strategic partnerships to drive its targeted sales of minimum RM1.8 billion this year, with 74% aimed at property sales priced below RM500,000. These include the digital-centric "Desire" campaign for buyers looking for ready-to-move-in homes as well as workspaces bundled into hassle-free and attractive sales package," it said in a statement today.

Mah Sing also anticipates the zero-rating of the goods and services tax and the reintroduction of the sales and services tax to be positive for the property sector, due to the expected lower input costs, which it said will benefit property developers and buyers. Consequently, the lower costs will incentivize buyers and Mah Sing is confident that it can remain competitive.

"Our goal is to reinvent space, enhance life and ultimately enable everyone to own a home. Driven by our goal, we continue to focus on building affordably priced homes as this is what the market is currently looking for," said Mah Sing group managing director Tan Sri Leong Hoy Kum in the same statement.

"In fact, a survey from the Lafarge-EdgeProp MYHOME campaign, released in May this year, shows that 79% of Malaysians are looking for homes below RM600,000. This shows that our strategy is in the right direction as 74% of our sales target for 2018 is below RM500,000," he added.

The group also believes that improving market sentiments and growing demand for housing indicate that Mah Sing is on the right track to look out for more strategic land banks especially in Klang Valley, joint ventures and investment opportunities.

According to Leong, Mah Sing's net cash position as of June 30, 2018 provides opportunities to pursue more land banks. "We will stay hungry to look for more land acquisitions especially in Klang Valley and continue to stay focused in offering affordably priced properties to meet the current market demands."

In the second quarter ended June 30, 2018 (2QFY18), the group's net profit fell 15% year-on-year to RM77.13 million from RM90.39 million, as revenue retreated 19% to RM589.28 million from RM727.17 million. This caused its cumulative 1HFY18 net profit to fall 22% y-o-y to RM141.33 million from RM180.81 million on a revenue of RM1.17 billion, which is 19% lower than the year ago's RM1.45 billion. In its stock exchange filing today, it said the decline in revenue and profit in the cumulative period was attributable to more new sales secured from new projects with limited contribution during their initial stage of construction

Going forward, Mah Sing believes the mid- to long-term prospects of the property market is still healthy and is in line with the improving Malaysian economy, strong demographic forces coupled with increased connectivity and initiatives to facilitate easy ownership for house buyers.

"The residential segment, especially affordable mass market properties in strategic locations in Klang Valley have shown resilience to market challenges," it added.

At 4.38pm, Mah Sing shares slid 2 sen or 1.7% to RM1.17, giving it a market capitalisation of RM2.86 billion.