Mah Sing Group Berhad (Mah Sing), achieved property sales of approximately RM847.1 million for the period ended Sept 30 or 77 percent of 2020 sales target of RM1.1 billion, notwithstanding the challenging business and operating conditions following the impact of Covid-19 pandemic this year.
Following that, Mah Sing continues to be on track to achieve its RM1.1 billion sales target this year underpinned by several new launches lined up in the fourth quarter, together with the well-received projects launched recently such as M Luna in Kepong and M Adora in Wangsa Melawati. These affordably priced projects are expected to continue to garner the interest of homebuyers.
Mah Sing’s Founder and Group Managing Director, Leong Hoy Kum said, “We are confident in achieving our RM1.1 billion sales target by the financial year end. The reintroduction of the Home Ownership Campaign and other property-friendly measures under the PENJANA stimulus package as well as the low interest rate environment are positive for the property market. The Group should also benefit from the 5 years stamp duty waiver for properties priced below RM500,000 for first homebuyers as introduced in the Budget 2021.”
Mah Sing’s balance sheet remains healthy with cash and bank balances and investment in short-term funds of approximately RM1.13 billion, while the Group has remaining landbank of 1,996 acres with remaining gross development value and unbilled sales totalling RM24.34 billion as at Sept 30.
Backed by the Group’s disciplined financial management and healthy balance sheet, Mah Sing will continue exploring selective land banking for continuous growth.
At the same time, Mah Sing’s entry into proposed gloves manufacturing via Mah Sing Healthcare is making strides to meet the targeted production date of April 2021 and to cater for the pent-up demand for gloves.
The work at the glove manufacturing factory is progressing as scheduled, whereby the equipment supplier has commenced fabrication of selected parts of the machinery which needs to be fabricated in-situ at the factory. Installation of the initial lines has also started at the completed part of the factory.
The first six production lines are expected to be ready for operation as early as 2Q 2021, followed by another 6 production lines expected to be ready by 3Q 2021. These 12 production lines are Phase 1 of Mah Sing’s proposed diversification into gloves and has a maximum production capacity of up to 3.68 billion pieces of gloves per annum.
As the factory is expected to start its operation with 6 production lines as early as 2Q2021, the Group is in a good position to take advantage of the high spot price of gloves. Thus, Mah Sing expects the glove manufacturing business to be able to generate sales for the Group relatively quickly with the projected contribution estimated to come in as early as 2Q2021.
The Group’s current quarter profit before tax of RM40.5 million was higher as compared to the immediate preceding quarter of RM22.4 million mainly due to the resumption of operations with adherence to the necessary standard operating procedures during the Recovery MCO in current quarter. Revenue of RM388.2 million for the current quarter was also higher as compared to the immediate preceding quarter of RM298.6 million.
For the nine-month period ended Sept 30, the Group posted profit before tax of RM106 million on the back of revenue of RM1.1 billion.
Revenue from property development was RM811.9 million whereas operating profit was RM107.6 million for the nine-month period ended Sept 30.
The nine months under review was affected by the lingering impact of Movement Control Order (“MCO”) when site progress of all projects came to a halt for nearly two months and Conditional MCO where level of activities on sites were generally lower due to adoption of strict standard operating procedures in compliance with regulatory requirements. The strict lending environment also affected sales conversion which weighed on revenue recognition.
In addition, contribution from matured projects like Lakeville Residence were lower as they were completed and handed over during the current period while new projects such as M Oscar, M Arisa, M Luna and M Adora are at initial stages of completion which results in minimal progressive billings for these projects.
The development projects which contributed mainly to the Group’s results include M Vertica in Cheras, M Centura in Sentul, Southville City in KL South, Meridin East in Johorand Lakeville Residence in Jalan Kuching. Other projects which also contributed include M Oscar in Off Kuchai Lama, M Aruna in Rawang, M Luna in Kepong, Ferringhi Residence and Southbay City in Penang, Sierra Perdana, Meridin @ Medini and Mah Sing i-Parc in Johor.
For the plastics segment, it recorded revenue of RM204.7 million and operating profit of RM8.4 million in the current period.