Friday 29 Mar 2024
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KUALA LUMPUR (May 1): The father-son team at the helm of Malaysian Resources Corp Bhd (MRCB) is taking the company's challenges in stride. The challenges include cutting the property and construction firm's debt, and at the same time, expand landbank to undertake more real estate projects.
 
The Edge Malaysia business and investment weekly (Edge Weekly), in its latest May 4-10 issue, reported that MRCB (fundamental: 0.6; valuation: 0.8) group managing director Tan Sri Mohamad Salim Fateh Din and his son Mohd Imran Tan Sri Mohamad Salim aimed to achieve a realistic debt ratio for MRCB to further grow the firm.

MRCB executive director Mohd Imran told Edge Weekly : “From the perspective of borrowings and legacy issues, MRCB held on to too many buildings after it developed them. When you do that, the top line goes up but after you pay interest to the banks (to service the loan to develop the buildings), what is left is very little."

“So, one of our key criteria was a debt-restructuring or de-leveraging exercise. We want to have a realistic debt ratio, which will allow us to grow bigger in the future, focusing on urban property development,” Mohd Imran said.

Edge Weekly, quoting equity analysts and property consultants reported that it was crucial for MRCB to reduce borrowings as quickly as it expanded its landbank.

Over the past year, MRCB had aggressively bought prime tracts here at prices deemed higher than the market value, according Edge Weekly.   

Mohamad Salim contended that the move was crucial to ensure continuity in MRCB's property development operations.

“We don’t want to come to a point where suddenly we don’t have any more land to develop,” he said.

Yesterday (Thursday, April 30), MRCB shares fell two sen or 1.5% to close at RM1.32 for a market capitalisation of RM2.36 billion. This compared to its latest reported book value per share of RM1.13.

For a better understanding on MRCB, kindly pick up and read the latest issue of Edge Weekly.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

 

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