This article first appeared in The Edge Financial Daily on July 11, 2019

KUALA LUMPUR: Paramount Corp Bhd, whose share price closed at its all-time high yesterday, is planning to launch four new projects with a combined estimated gross development value (GDV) of RM783 million in the second half of 2019 (2H19).

Most of the group’s launches this year have been pushed to 2H19 as the property market has been soft, its group chief executive officer (CEO) and director Jeffrey Chew told reporters after its extraordinary general meeting (EGM) here, where the group obtained its shareholders’ approval to divest the 65% stake in its tertiary education operations.

Among the launches are the group’s mixed-use project Berkeley Uptown in Klang, Selangor, which will have an estimated GDV of RM300 million, a Rumah Selangorku project in Kemuning Idaman, and the Sejati Lakeside residential development in Cyberjaya, with an estimated GDV of RM113 million and RM130 million respectively.

In addition, Paramount will also launch the third phase of its Utropolis Batu Kawan project in Penang, worth an estimated GDV of RM240 million.

The group’s remaining land bank, which stands at about 580 acres (234.72ha) and located mainly in the Klang Valley, has an estimated GDV of RM7.5 billion, said Chew, which will keep the property developer busy for seven to eight years.

“We are always on the lookout for potential land bank, whether it is [via] direct acquisition or joint ventures. The good news is that many people have been approaching us,” said Chew.

When asked if the developer is able to achieve its RM1 billion sales target this year, Chew said the group is on track to do that.

He added that Paramount will see a continued improvement in earnings for financial year 2019 on the back of its new launches.

Moving forward, Chew is anticipating the revenue contribution from the property segment to increase up to 85% in the next five years, from the current 70%.

As for Paramount’s plan to expand its footprint overseas in the next five years, he said the group is talking to potential partners, but is in no rush to make any decision.

As for having obtained shareholders’ approval to dispose of the stake in its tertiary education business for RM38.5 million, Chew said, “The intention is not to divest to exit, but to divest to a strategic partner so that we can do more outside of Malaysia.

“This allows us to reduce our exposure [to the highly competitive education sector] and monetise some of the assets [we have] so that we can do more [activities related to the] property [sector],” he said of the stake sale.

“I think the divestment will help us have more flexibility in terms of investing in new areas, including co-working space,” he added.

“We are also trying to build a recurring income stream ... whether it is education properties that we lease out or co-working space,” said Chew.

Meanwhile, the group is also planning to sell off a controlling stake in its K-12 education business for RM540.5 million. That plan will come up for shareholders’ consideration in an upcoming EGM.

Paramout shares climbed four sen or 1.75% higher to settle at their record high of RM2.32 yesterday, with a market capitalisation of RM1.01 billion. Over the past 12 months, the stock has climbed nearly 30% from RM1.79.