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Friday, May 30, 2008

Magna Prima targets fivefold jump in revenue

PROPERTY developer Magna Prima Bhd is targeting revenue to increase fivefold to RM1.6 billion in four years, contributed mainly by Magna City Kuala Lumpur, its five-in-one integrated lifestyle development.

The RM1.1 billion Magna City, on a 4.12ha freehold site along Jalan Kuching, will be developed in phases over four years, starting from the third quarter.

It will include shop-lots, signature offices, two blocks of serviced apartments comprising 800 units, a boutique hotel and a three-level retail mall.

"With a total current gross development value (GDV) of RM2.6 billion and estimated future revenue of RM1.6 billion, the group is confident of sustaining its earnings visibility for at least the next four years," chief executive officer Lim Ching Choy said after Magna Prima's annual general meeting (AGM) yesterday.

INTEGRATED DEVELOPMENT: Lim talks about Magna City at the AGM

The RM2.6 billion GDV will come from its 34.4ha in the Klang Valley, currently under development.

In the fiscal year ended December 31 2007, Magna posted a higher net profit of RM26.6 million compared with RM93,000 in 2006, largely due to sales from its six-star Avare condominium at the Kuala Lumpur City Centre and the Dataran Otomobil township in Shah Alam, Selangor.

Revenue jumped 326 per cent to RM344.44 million.

"We are taking this occasion (AGM) to unveil Magna City. We have opened it for registration and expect sales to be encouraging as it is the first five-in-one concept project in the northern corridor to meet the integrated needs of consumers," Lim said.

He added that the RM100 million boutique hotel will offer 250 rooms, while the RM445 million lifestyle non-conventional retail mall will be retained to strengthen its recurring income stream.

The serviced apartments are targeted at local as well as overseas buyers from Hong Kong, Singapore, Indonesia, India, South Korea and Australia, and those who have previously purchased Magna Prima properties.

The one-, two- and three-bedroom apartments will have built-ups of 600, 900 and 1,350 sq ft respectively, while the penthouses will offer 3,300 sq ft space.

The units will be priced from RM230,000, or RM350 per sq ft, to RM1.25 million each.

Magna Prima is also looking for land within the Kuala Lumpur city boundary to launch additional integrated developments. It is negotiating with a landowner and expects to conclude a deal for a piece of land in two months, Lim said.

"Our business model is to go for urban pocket-size developments where the GDV is of significant value.

"The group will focus on strengthening its position as a niche integrated lifestyle developer and leverage on the demand for exclusive products in prime locations to ensure sustainable growth in sales and earnings."

On the rising cost of raw materials, Lim said that Magna Prima has ventured upstream into the ready-mix concrete business to ensure regular supply of materials for its projects. It is also sourcing globally to reduce building costs.

Yesterday, shareholders approved the proposed final dividend of seven sen per share for 2007.

By New Straits Times (by Sharen Kaur)

For more information, please visit the official website:

Lifestyle project to drive Magna’s revenue

KUALA LUMPUR: Magna Prima Bhd is confident of clear earnings visibility at least over the next four years, thanks mainly to its newest project, Magna City.

Executive director and chief executive officer Lim Ching Choy said the company was targeting revenue of about RM1.6bil over the four-year period.

“The projected revenue will be largely driven by Magna City, our latest 5-in-1 integrated lifestyle project in Jalan Kuching,” he said after the company AGM yesterday.

The integrated development project will comprise shop lots, signature offices, serviced apartments, a hotel and a retail mall.

Construction on the 10.23-acre freehold site will be undertaken in four phases, with the first phase to start in July. The final phase is targeted for completion by the third quarter of 2011.

Magna Prima currently has a gross development value (GDV) of RM2.13bil.

On coping with challenges, Lim said Magna Prima had a policy of mitigating the effects of rising raw material prices by opting for bulk purchasing and hedging the purchase of building materials where possible.

“We have also ventured upstream into the ready-mixed concrete business to ensure a regular supply of materials to our projects besides also sourcing globally for materials to reduce building costs,” he said.

For the first quarter ended March 31, Magna Prima posted a net profit of RM5mil on sales of RM48.3mil from a net profit of RM1mil on revenue of RM25.4mil for the same quarter in 2007.

Among the company's newly launched projects is the U1 Shah Alam, a 3-in-1 integrated lifestyle development venture with GDV of RM135mil.

By The Star

Property scene in Vietnam still good

PETALING JAYA: The Vietnamese economy is going through a tough period with high inflation, a poorly performing stock market and a depreciating currency but Malaysian investors there are not unduly worried at the moment.

“A cooling off in the economy, which has recorded an average gross domestic product growth of 8% in the past three years, is a good breather for the country.

“The current snags will not tailspin into anything worrisome and Vietnam is on track for sustainable growth,” Berjaya Land Bhd chief executive officer Datuk Francis Ng told StarBiz yesterday.

He said Vietnam was attracting a huge inflow of foreign direct investments (FDIs), which totalled US$25bil last year. Most of the FDIs were in infrastructure development, manufacturing and property development sectors.

Such comments are comforting to investors who have over the past few months become anxious over the state of Vietnam's economy.

Fitch Ratings has cut the country’s credit rating, and its currency is taking a beating. Its stock market has been closed for the past few days due to a computer glitch.

But the main cause for concern is rising inflation, which in May topped 25%, and the measures taken to cool it.

TA Securities property sector analyst Kamarul Zaman Hassan told StarBiz that Malaysian property players had not been too concerned about the currency and inflation crisis now facing that country.

”The market is still there for property in Vietnam,” he said, adding that many investors saw the current turmoil as a short-term correction.

“Vietnam has seen a lot of inflows of funds in the past three years, so a correction was expected,” Kamarul said. “But in the long term, the players expect growth to continue as it has in the past three years.”

Ken Peng, a Citigroup analyst who covers Vietnam, said in a report dated Tuesday that the weakening of the dong was a result of severe foreign currency shortage.

“The central bank (SBV) is curbing foreign currency supply to preserve foreign reserves for refined petroleum imports and other contingencies,” he said.

The potential for further currency depreciation was worsening Vietnam’s balance of payments position, Peng said.

A host of Malaysian companies have made a steady beeline for Vietnam, one of South-East Asia's fastest growing economies. From rubber glove makers to can manufacturers, Malaysian companies have been increasing their exposure to Vietnam.

But the group that has made the biggest splash has been the construction and property players, which view Vietnam as a huge earnings kicker to their Malaysian-centric operations.

Berjaya Land has six projects in Vietnam – two in Hanoi and four in Ho Chi Minh City. The projects, with an estimated gross development value (GDV) of RM40bil, will span from 2009 to 2020.

Its maiden residential project, The Thach Banh New City project in Hanoi, with GDV of US$500mil, will be launched in the middle of next month.

“The take-up of recently launched residential projects in Ho Chi Minh City is still very strong. We are in Vietnam for the long term and are confident of the long-term growth of the economy,” Ng said.

A WCT Land Bhd spokesman said the Vietnamese government was very pro-active in assisting overseas companies develop designated areas in the country's cities.

“Fundamentally, the property market should still hold out quite well, given the huge population of 85 million, of whom more than half are less than 30 years old,” he said.

WCT Land, which has been granted an investment certificate to undertake a mixed commercial development in Ho Chi Minh City, will be launching next year the Platinum Plaza, which has a projected GDV of RM1bil. The project comprises a shopping mall, a hotel, two office towers and serviced apartments.

WCT Land is also in the process of getting its next investment certificate for the RM2bil Gateway Point on 8.4ha near the commercial business centre of Binh Thanh District in Ho Chi Minh City.

SP Setia Bhd is also on track to launch its maiden residential project, EcoLakes in My Phuoc in Binh Duong province, at the end of next month.

Last June, SP Setia teamed up with government-linked conglomerate Becamex IDC Corp to develop the RM2.5bil township.

Gamuda Land Sdn Bhd, too, will launch its Yen So Park integrated development on 500 acres south of Hanoi this year. The RM8bil project will comprise high-rise office towers, four- and five-star international hotels, a convention centre, shop offices and residential components.

By The Star - StarBiz - (by Angie Ng and Loong Tse Min)

Mah Sing Q1 net profit rises 25% to RM22.3mil

PETALING JAYA: Mah Sing Group Bhd reported 25% jump in net profit to RM22.31mil for the first quarter ended March 31 compared with RM17.9mil in the previous corresponding period.

In a statement, the company attributed the higher net profit on revenue of RM140.7mil to contribution from nine projects in first quarter compared with seven projects in the previous corresponding quarter.

Group managing director and group chief executive Datuk Seri Leong Hoy Kum said growth markets this year were medium- to high-end residential and commercial projects in good locations.

He said the company expected another good year underpinned by its unbilled sales of about RM1bil as at March 31, which was twice its revenue last year.

The company also had a remaining gross development value of RM2.98bil, which would ensure earnings visibility for seven years, Leong added.

By The Star

Gamuda, BLand down on Vietnam worries

KUALA LUMPUR: Property stocks Gamuda and Berjaya Land fell in the morning session Friday, dragged down by worries about their Vietnam ventures on the country’s worsening macro outlook and surge in inflation.

However, gains by blue chips including DiGi, BAT and Genting lifted the KL Composite Index.

At 12.30pm, the KLCI was up 5.99 points to 1,267.81. The FBM Emas added 17.18 points to 8,475.15 and the FBM Second Board gained 7.51 points to 5,795.44. The property sector index fell 5.45 points to 790.84.

Turnover was 371.88 million shares valued at RM950mil. There were 204 gainers, 291 losers while 254 counters were unchanged.

Asian markets were mixed, with Japan’s Nikkei 225 up 1.24% to 14,299.53, Singapore’s Straits Times Index added 0.55% to 3,178.08 while Hong Kong’s Hang Seng Index gained 0.56% to 24,520.69 but Shanghai’s A Share Index fell 0.27% to 3,559.12.

Vietnam’s stock market was the world’s biggest decliner when it fell 55% to 414 after a government report showed inflation had jumped the most since 1992. The stock exchange has yet to resume trading after a technical glitch over the past three days.

Light crude oil eased to US$126.27 (RM409.12) per barrel while crude palm oil fell RM61 to RM3,504 per tonne in line. The ringgit was quoted at RM3.24 to the US dollar.

At Bursa Malaysia, Berjaya Land-LB fell 55 sen to RM5 with 9,000 units done. IOI Properties lost 50 sen to RM9.90. Gamuda was the most active with 53.73 million shares done, down 38 sen to RM2.60 while Berjaya Land lost 30 sen to RM5.

Other decliners were Shell, falling 30 sen to RM10.90, MPI and Nestle 25 sen each to RM8 and RM29.50 while Proton gave up 20 sen to RM3.40 and Tradewinds 19 sen to RM4.96. Actively traded MRCB lost seven sen to RM1.35.

United Plantations fell 30 sen to RM13.80 but KL Kepong rose 40 sen to RM17.60 and Kulim gained 25 sen to RM9.10 and Kulim-WB 15 sen to RM6.45.

DiGi, BAT and PPB advanced 50 sen each to RM25.50, RM44 and RM11.50 respectively as they are viewed as defensive counters.

Genting rose 20 sen to RM6.50 and Resorts two sen to RM3.24, despite Genting’s first quarter net profit fell 33% to RM439.4mil.

By The Star (by Joseph Chin)

Gamuda tumbles 13pc

GAMUDA Bhd led shares of Malaysian property developers lower in Kuala Lumpur trading on concern their sales in Vietnam will be eroded by higher borrowing costs.

Gamuda, Malaysia's second-biggest builder by stock market value, tumbled 13 per cent to RM2.60 at 12.30 pm. Berjaya Land Bhd lost 5.7 per cent, while SP Setia Bhd, whose only overseas projects are in Vietnam, dropped 4.3 per cent.

Malaysian developers have increased investments in Vietnam, where the economy grew at the fastest pace in a decade last year. Gamuda's projects include the Yen So Park in Hanoi, a development of offices, luxury apartments and a convention center that the company values at US$1 billion.

"There may be de-ratings coming in on these property projects," said Jason Lee, who helps oversee the equivalent of US$2.1 billion as general manager of equities at Amanah Raya-JMF Asset Management in Kuala Lumpur. "Nobody really knows the impact. These property companies have some fairly big exposure."

Vietnam's central bank raised its key interest rate to 12 per cent on May 17 and the country is heading for a "currency crisis" because the bank has kept the dong too strong as inflation soars, Morgan Stanley said on May 28.

Citigroup Inc cut its target price for Gamuda 14 per cent to RM2.57, turning more cautious on the company's venture in Vietnam, analyst Choong Wai Kee said in a report today. He maintained his "sell" rating on the stock. Gamuda is based in Petaling Jaya, outside the Malaysian capital.

Ho Chi Minh Projects

SP Setia, Malaysia's biggest property developer, said on April 16 it plans to invest US$100 million in Vietnamese projects that may generate as much as 30 per cent of the company's profit and sales in three years.

Puchong, Malaysia-based SP Setia last year began developing the 558.4-acre (226-hectare) EcoLakes project in My Phuoc, 40 kilometers (25 miles) north of Ho Chi Minh City. The company also plans to develop 79 acres of land in Ho Chi Minh City.

SP Setia fell 18 sen to RM4.02, headed for the largest drop since April 3. Berjaya Land declined 30 sen to RM5, set for the biggest fall since March 10.

Berjaya Land said on February 14 it plans a debt sale that may raise RM875 million (US$270 million) to help expansion in Vietnam. The company said in December that the projects may generate sales of RM31.1 billion.

By Bloomberg

UEM Builders posts RM29m Q1 net profit

UEM Builders Bhd reported RM29.2 million net profit on RM595.8 million revenue in the first quarter ended March 31 2008, compared with RM17 million net profit and RM714.6 million revenue in the same period last year.

The firm said the lower revenue was mainly due to completion of major domestic construction projects in 2007 such as the Rawang-Ipoh electrified double track project and PLUS third lane widening project (Seremban-Ayer Keroh), while other new projects are in the start-up phase and have yet to generate revenue.

"We are happy with the results and will strive to achieve our targets despite a challenging business environment where significant cost escalation in material prices has become the norm," managing director Datuk Ridza Abdoh Salleh said in a statement.

He said the company is implementing various measures to counter the impact of price volatility in construction materials and fuel, including the inclusion of negotiated price escalation clauses in the construction contracts.

"Moving forward, the group is positive that the Penang second bridge project will be implemented as planned," he said, adding that progress of works on the project has been significant and the company has incurred more than RM200 million to-date.

By New Straits Times