Mah Sing’s 2Q21 earnings get boost from affordable homes launches

The property developer’s cash generation remained strong due to several vacant possessions during the year
MAH Sing Group Bhd reported a 40% year-on-year (YoY) rise in earning to RM40 million for the fourth quarter ended Dec 31, 2021 (4Q21), driven by strong execution of its projects especially its M-Series of affordably priced projects and effective digital marketing initiatives.
Revenue for the quarter was RM537 million, up 14% YoY. The company board has proposed a 2.65 sen per share dividend, its exchange filing yesterday noted.
Full-year earnings amounted to RM160 million or 60% higher YoY, while revenue came in at RM1.75 billion, up 15% YoY.
Despite lockdown dislocation, the property developer noted its cash generation remained strong due to several vacant possessions during the year, with year-end cash balances amounting to RM1.02 billion, even with three new land acquisitions and a steady rate of work.
At the end of 2021, Mah Sing had unbilled sales of RM1.9 billion, which provide earnings visibility for the group.
Leong notes Mah Sing’s strong balance sheet enables it to look out for new land pieces in strategic areas in Greater KL, Klang Valley, Penang and Johor that are ideal for affordable products
“We plan to launch RM2.4 billion worth of properties in 2022. We target to achieve RM2 billion in new property sales this year, a 25% growth from 2021. Price points will be attractive, with 60% of properties below RM500,000 and 94% below RM700,000,” Mah Sing’s founder and group MD Tan Sri Leong Hoy Kum stated in a release yesterday.
With the good rate of work on its projects, the group is targeting a higher rate of vacant possessions in 2022.
Leong noted Mah Sing’s strong balance sheet enables it to look out for new land pieces in strategic areas in Greater KL, Klang Valley, Penang and Johor that are ideal for affordable products.
“With stronger sales and a rebound in construction activity, we expect to deliver even better performance this financial year 2022. The pursuit of earnings growth has not affected our focus on quality, service and acting responsibly,” he added.
Among its 21 projects to support 2022 sales growth are M Senyum in Sepang, M Astra (Setapak), M Nova (Kepong), M Panora (Rawang), the remaining phases of Ferringhi Residences in Penang and doublestorey link homes in Meridin East, Johor Baru.
Mah Sing is also scouting for attractively priced residential and industrial lands outside of Klang Valley — such as Seremban, Malacca and Perak — for projects in the affordable range.
The development projects that were the key earnings contributors in 2021 include M Vertica in Cheras, M Arisa and M Centura (Sentul), M Luna (Kepong), M Aruna (Rawang), Meridin East (Johor), M Oscar (Off Kuchai Lama), M Adora (Wangsa Melawati), Southville City (KL South) and Southbay City (Penang).
Other projects which also contributed include Ferringhi Residence in Penang, Sierra Perdana, Meridin@Medini and Mah Sing i-Parc in Johor.
Mah Sing will launch three new M Series developments namely M Senyum in 1Q22, M Astra (2Q22) and M Nova (3Q22), which will be located in Salak Tinggi, Setapak, and Kepong respectively.
The M Senyum is a residential development of two-storey terrace homes offering four-bedroom and three-bathroom homes starting at 1,555 sq ft with a land size of 20’ x 60’, and an indicative price starts at RM450,000.
M Astra comprises two blocks of serviced residences of three-bedroom and four-bedroom units, with an indicative built-up ranging from 850 sq ft to 1,044 sq ft, and an indicative price of RM399,000.
M Nova comprises serviced residences, with indicative built-up sizes ranging between 700 sq ft and 1,000 sq ft and an indicative price starting at RM318,000.
Mah Sing’s property development segment recorded an operating profit of RM259.7 million on the back of RM1.34 billion in revenue, which was 64% and 13% higher YoY respectively.
Its manufacturing segment recorded a revenue of RM370.3 million, an increase of 28.5% YoY on higher sales of plastic pallets and automotive parts as well as sales of gloves.
The group’s 12 production lines for healthcare are fully commissioned and have obtained the required certifications for medical-grade glove sales to the US, Canada, the European Union, and the European Economic Area.
It has recently received an updated 510(k) clearance from the US Food and Drug Administration which will allow the company to market medical-grade examination gloves in the US market.
Mah Sing shares closed half a sen lower at 67.5 sen yesterday, valuing the developer at RM1.64 billion.