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Thursday, December 18, 2008

Mah Sing plans to diversify via overseas expansion, says chief executive

KUALA LUMPUR: The Mah Sing Group plans to diversify by expanding overseas, its chief executive Datuk Leong Hoy Kum told Oxford Business Group (OBG).

In an exclusive interview with The Report: Malaysia 2009, to be published by the global publishing, research and consultancy firm OBG, Leong said: “We are exploring countries like China, India, Vietnam and Indonesia.

“With regard to Vietnam, we have been closely monitoring the situation, and in fact, the current scenario allows us to have better pricing negotiations on land acquisitions. However, we shall definitely weigh all the risks and returns before venturing overseas.”

Leong said the group, which is the country’s premier lifestyle developer, was not in a hurry and would be very careful in evaluating any business expansion to ensure the investments would allow the company to chart good growth.

“We are open to opportunities which fit our business model, including a fast turnaround to give us a high ROE (return on equity) and it must also give us the required margin,” he said.

“Should we venture overseas, it is likely we will do it via a joint venture with an established party so that we minimise the risk exposure as we can tap on this local knowledge to expand our business and tap on opportunities in their country.

“Partnering with a knowledgeable and reputable party would give us a strategic advantage and we will start small before embarking on bigger projects.”

Leong said a number of factors would continue to support growth and boost demand for real estate projects within Malaysia.

“There is strong demand from Malaysia’s baby boomers who have higher purchasing power, as well as increasing foreign appetite for properties in Malaysia which are world class, yet undervalued compared to regional peers,” he said.

The Report: Malaysia 2009 will be published in association with OBG’s primary partner, the Malaysian Industrial Development Authority (MIDA). OBG’s team of international analysts based in Kuala Lumpar work in collaboration with a number of local partners, Ernst & Young for accountancy, Shearn Delamore & Co for legal affairs and OSK Investment Bank Bhd for capital markets.

OBG said the report, rated as the premier guide for foreign direct investment into the country, would provide an in-depth analysis of the domestic and foreign political landscape, macro-economic policy and sectoral developments, and trace the astonishing developments of Malaysia.

It said Malaysia had been recognised by major corporations around the world that were seeking to establish or expand investments in the country.

By The EDGE Malaysia

Developer Hua Yuang optimistic on demand

PROPERTY developer Hua Yang Bhd is optimistic of good demand for houses priced less than RM380,000 each, despite a general consensus among consultants that prices will fall on a slowing economy.

"Our strategy has always been to provide affordable residential of quality finishes. The demand for homes ranging from RM90,000 to RM380,000 remains encouraging," chief operating officer Ho Wen Yan said in a briefing in Batu Caves, Selangor, yesterday.

The company expects to perform better for the year to March 31 2009 as it made brisk sales in the middle of 2008,

In its second-quarter results ended September 30 2008, main board-listed Hua Yang posted a net profit of RM2.34 million on revenue of RM28.02 million. Profit was up by 26 per cent from the corresponding quarter a year ago.
First-time house buyers are looking for more value-for-money properties, Ho said. He cited Hua Yang's recently-launched phase one of Symphony Heights apartments in Batu Caves, which have seen a 40 per cent take-up rate.

"At between RM135,200 and RM324,500, these units are suitable for newly-weds, families with young children and first-time home owners," he said.

Recently, the Association of Valuers & Property Consultants in Private Practice Malaysia president James Wong Kwong Onn said that sales of properties priced below RM300,000 and luxury condominiums tagged at above RM750,000 are already affected by a slower economy.

Hua Yang's other township developments are in Johor and Perak.

Ho estimates that these future developments, including strategic plots in Klang Valley and Negri Sembilan, to generate a gross development value of some RM800 million in the next five years.

By Business Times

Hua Yang to develop RM1bil projects

KUALA LUMPUR: Hua Yang Bhd aims to develop various property projects in Malaysia with a total gross development value (GDV) of RM1.1bil over the next eight years.

Chief operating officer Ho Wen Yan said the company would focus on developing residential, commercial and light industrial factory projects, particularly in Perak, Johor, Seremban and the Klang Valley.

“We will fund most of these projects from our internal cashflow and our bank partners are also supportive,” he told reporters after a briefing on the company’s performance yesterday.

He said the company planned to launch a mixed development project on 17.89 acres in Sungai Besi, with a GDV of RM700mil, in the second half next year.

The company was in acquisition mode and was looking for landbank in Selangor as well as in other states, Ho said, adding that 80% of its development was currently residential.

“We are exploring business opportunities in east Malaysia currently and hope to expand there in the next three to five years as the market is growing,” he said.

The company was targeting to acquire smaller plots in Kuala Lumpur and was looking at land of between 150 and 300 acres outside the Klang Valley, he added.

The company currently holds about 1,000 acres of undeveloped landbank, which could potentially generate more than RM1.8bil in GDV.

“We want to focus on the middle-income market to provide affordable housing in the next three to five years,” he said, adding that the company was not discounting the possibility of venturing into the high-end market going forward.

Ho said the company had predicted single-digit growth in revenue and net profit in the financial year ending March 31 (FY09) and FY10.

“We are optimistic as demand for affordable houses is still encouraging,” he said.

In FY08, the company registered net profit of RM6.72mil on revenue of RM59.94mil.

Ho said the cost of materials this year was 10% higher than last year.

“We have and will continue to re-value and re-engineer all our buildings and re-design some of the building structures to reduce costs but will maintain quality,” he said, adding that the company had not delayed any of its launches amid the global economic slowdown.

By The Star (by Lee Kian Seong)

Gamuda Q1 net profit down on weak property market

PETALING JAYA : Gamuda Bhd attributes its weaker performance in the first quarter ended Oct 31 to lower contributions from its property and construction divisions.

Its net profit in the quarter declined 37.5% to RM55.03mil from RM88.06mil in the previous corresponding quarter.

Pre-tax profit plunged 32% to RM72mil from RM106.4mil while revenue jumped 27% to RM614mil from RM482.4mil previously.

“Property sales have been weak as a result of the uncertain economic outlook,” it said in a statement.

However, it added, infrastructure construction work on the Yenso project in Vietnam was progressing well.

“The works on the public parks and lake clearing are in full swing. The works on the sewerage treatment plant have commenced with the award of the civil works and the mechanical and electrical works contracts,” it said.

Sales of certain commercial parcels for development had been delayed due to the difficulty in obtaining financing facilities for new investments worldwide, it said, adding: “The parties are expected to proceed with their investments as and when the financial markets normalise.”

On its electrified double-tracking railway project, it said the work progress achieved to-date was 18%, with 83% of the contract works and services (including the Electrification System Works) awarded to various bumiputera and non-bumiputera sub-contractors and suppliers.

Under the terms of the contract signed by the project company and the Government, 95% of the land should be handed over by now but, so far, only 61% has been handed over. The project faces potential delay in land acquisition, especially in Penang.

“Up to now, the delay in project completion due to the land acquisition is estimated at one year,” it said.

By The Star (by Eileen Hee)