This article first appeared in City & Country, The Edge Malaysia Weekly on November 14, 2022 - November 20, 2022

No. 9 (Joint Ranking) | Mah Sing Group Bhd

Mah Sing Group Bhd started in the plastics industry in 1965 but ventured into property development in 1994. Over the decades, the group has established a solid and diverse portfolio that includes residential projects, townships, integrated developments, office buildings, retail projects and industrial developments.

Today, the group has more than 50 projects in Greater Kuala Lumpur, the Klang Valley, Penang, Johor and Sabah, and has generated billions in revenue in the past five years.

In an email interview with City & Country, Mah Sing founder and group managing director Tan Sri Leong Hoy Kum says the group is committed to creating practical and high-quality design spaces and homes. In line with its vision of inventing sustainable future living that enhances the quality of life, Leong says the group has been consistent in developing products that meet market demand.

For FY2021 ended Dec 31, 2021, Mah Sing’s net profit surged 70.51% y-o-y to RM160.86 million, from RM94.34 million, while revenue rose 14.58% y-o-y to RM1.75 billion, from RM1.53 billion. Its property development segment recorded an operating profit of RM259.7 million on the back of revenue of RM1.34 billion, which were up 64% and 13% y-o-y respectively.

The group attributes this achievement to higher sales and revenue recognition of projects under construction as well as the finalisation of construction costs for certain contracts.

Leong also highlights the group’s target of developing affordable properties for the upcoming year as well as its plans to grow its land bank in strategic locations.

Tan Sri Leong Hoy Kum: Mah Sing registered sales of RM550 million for the second quarter this year, which ended on June 30, locking in RM1 billion in new property sales during the first half of 2022. It is safe to say that these are the highest quarterly and half-year sales we have recorded since 2017. With our strong sales performance, we are on track to meet our sales target of RM2 billion this year.

We acquired freehold land in Mukim Tebrau, Johor Baru, in June 2022 to develop M Minori. It will be a mixed-use development comprising a few blocks of serviced apartments with a gross development value (GDV) of RM469 million.

Additionally, Mah Sing’s new launches this year recorded good take-up rates. Some notable projects include M Senyum Camellia 2 with a take-up rate of 96% as well as Erica @ Meridin East Phase 3 and M Panora Phase 1A, which were fully taken up. We also officially launched a new sales gallery for M Nova, which is Mah Sing’s third project in Kepong. The gallery is targeted for launch in 4Q2022.

Mah Sing completed the handover process for M Vista, a high-rise development in Penang, in 1Q2022. Following M Vista, we delivered vacant possession (VP) for Towers A and B for M Vertica in Cheras in 3Q2022.

To put it simply, Mah Sing’s balance sheet remains strong, owing mainly to its disciplined financial management and strong execution of its strategy of driving growth through strategic land banking and quick turnaround.

Next year, Mah Sing will remain focused on developing affordable properties such as those in the M Series developments. The affordable properties are primarily targeted at first-time homebuyers buying for their own stay.

The DNA of our M Series consists of strategic locations with easy access to amenities, ready-built infrastructure and good connectivity. These requirements for a worthy property in the eyes of homebuyers are in line with current market demand.

We will continue to expand our land banking business selectively,  focusing on strategic land banks in Greater KL and the Klang Valley that are ideal for affordable developments. We are also looking at attractively priced residential and industrial lands outside of the Klang Valley such as in Seremban, Melaka and Perak for our affordable-range projects.

Mah Sing is known for its quick turnaround and nimble business model, where we are quick to adapt to changing market conditions. Our quick turnaround model has enabled properties to be built at the intended quality level while ensuring timely delivery. Our quick turnaround model has stood the test of time.

Apart from land banking and business models, Mah Sing’s strategic focus will remain on environmental, social and governance (ESG) aspects in order to commit to the group’s sustainability framework, mission pillars and material topics, all of which are aligned with the UN’s Sustainable Development Goals (SDG).

As we all know, Bursa Malaysia has added Climate Change Reporting to the Sustainability Reporting Framework for companies listed on the Main and ACE Markets. For all Main Market companies, it will be effective in FY2023, while for ACE Companies, it will be effective in FY2024.

Mah Sing’s sustainability plans and goals include maintaining and strengthening our FTSE4Good ratings by focusing on areas such as climate change and biodiversity.

We are currently embarking on and have established a transition plan for implementing the Task Force on Climate-Related Financial Disclosures (TCFD).  We are also simultaneously fine-tuning and improving meaningful reporting through linkages to the UN’s SDG with KPIs and targets on our material matters.

Climate change poses physical, transitional and legal reputational risks, and in efforts to combat that, we plan to develop mitigation plans as well as a decarbonisation strategy for the group’s operations.

We are also developing climate-change scenarios and incorporating climate change into our policy — Sustainability and Climate Change Policy — as well as strengthening our sustainability governance structure for oversight.

There are four upcoming projects for the remainder of the year, two in the Klang Valley and the others in Johor.

We expect to launch M Nova in Kepong in 4Q2022. With a GDV of RM790 million, the high-rise mixed-use development will comprise three blocks of serviced residences occupying 8.09 acres. The first two towers will have a total of 1,248 units with built-ups ranging from 700 to 1,000 sq ft and selling prices starting from RM318,000. The development will also have 11 retail lots and a drive-thru with built-ups starting from 2,000 sq ft and selling prices starting from RM1,000 psf.

The upcoming M Astra in Setapak is also a high-rise mixed-use development comprising two towers of serviced residences. With a GDV of RM618 million, the 39-storey development sprawled across a 5-acre parcel is expected to be launched this month. Both towers will have a total of 1,426 units with built-ups ranging from 850 to 1,044 sq ft and selling prices starting from RM399,000. There will also be 24 units of 2-storey retail lots with built-ups ranging from 1,420 to 4,024 sq ft.

Opened for registration of interest in September this year, Erica West Phase 1 @ Meridin East in Pasir Gudang, Johor, offers units of double-storey linked homes at a GDV of RM91 million. Meridin East is a 1,313-acre mixed-use township with residential, commercial and light industrial components. The 4-bedroom and 3-bathroom units at Erica West, with built-ups ranging from 1,670 to 1,775 sq ft and land sizes of 18ft by 65ft, are being sold at prices starting from RM424,000.

M Minori in Mukim Tebrau, Johor Baru, has a GDV of RM469 million. The project will have condominium units with built-ups ranging from 550 to 880 sq ft and selling prices starting from RM260,000. Sitting on a 6.94-acre parcel, the project is expected to be open for registration of interest in 4Q2022. M Minori will also have retail lots, with other details still being finalised.

At Mah Sing, we take operational efficiency seriously. To achieve cost optimisation, Mah Sing takes ownership of its design and construction management by creating construction-friendly designs, improving cash flow management, purchasing construction and architectural materials in bulk, and saving money through preliminary optimisation.

Apart from that, Mah Sing’s tagline is “Reinvent Spaces. Enhance Life”. True to our tagline, we are dedicated to creating functional yet high-quality design spaces for everyday living. We work hard to improve the quality of life for our residents and promote a healthy lifestyle for people of all ages. For instance, the affordable M Series developments offer practical layouts and designs, as well as sufficient facilities that residents will use, rather than offering superfluous facilities that will end up being white elephants or having high maintenance costs.

The Malaysian Industrial Finance Bhd (MIDF) Research report dated Oct 12 2022, has named Mah Sing its top pick due to its better earnings outlook. We were chosen because of the higher progress billing of projects in the Klang Valley while our new sales outlook will be supported by our quick turnaround strategy. As of 1HFY2022, Mah Sing had achieved new property sales of RM1 billion and was well positioned to meet this year’s sales target of RM2 billion.

MIDF also noted that the property sector is seen to be recovering due to higher loan approvals, which is consistent with its expectation of a marginal recovery for the sector. According to Bank Negara Malaysia’s data, total loan applications for property purchases in August 2022 increased to RM53.4 million after a decline of 12.5% in July. Loan application data remained stable in August, indicating that demand for property was unaffected by the OPR (overnight policy rate) hike because demand was supported by the economy’s reopening.

Furthermore, according to data released by the National Property Information Centre (NAPIC), the residential overhang units in 2Q2022 have eased to 34,092 units, compared to 35,592 units in 1Q2022. The decrease in residential overhang units in 2Q2022 could also be attributed to the economy’s reopening.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.