This article first appeared in The Edge Financial Daily on June 9, 2017 - June 15, 2017

KUALA LUMPUR: Affordable housing property developer Hua Yang Bhd hopes to realise its RM190.3 million investment in Magna Prima Bhd with the unlocking of the latter’s prime land in Jalan Ampang in the next two years.

“We hope the Lai Meng Girls’ School land project would take off in the next financial year [ending March 31, 2019] or in two years as we also want to realise the potential of our investment.

“It is a big investment for us, so we hope there is something exciting in the near future, but I cannot promise anything for now,” said Hua Yang chief executive officer Ho Wen Yan.

Ho’s statement seems to have halted Magna Prima’s initial plans to sell the 1.05ha land. The company put it up for sale for 170% more at RM400 million or RM3,500 per sq ft in July 2015, from the RM148.2 million purchase price in 2009.

On May 24, Magna Prima managing director Datuk Wira Rahadian Mahmud Mohammad Khalil said apart from an outright sale, it was also considering jointly developing the land with other developers.

Speaking to reporters after Hua Yang’s extraordinary general meeting yesterday, Ho said: “Magna Prima is resubmitting plans [to the authorities]. So, there are currently no plans for sale.”

In the meeting, shareholders gave their nod for the acquisition of an additional 20.12% equity stake in Magna Prima for RM123.7 million, after the Jan 25 purchase of 10.84% at RM66.6 million, making the latter an associate of Hua Yang.

Ho said both groups would be jointly pursuing projects in the mid- to long-term period, but for now, Hua Yang wants to focus on unlocking Magna Prima’s land parcels first.

“Magna Prima has five parcels of good land in Kuala Lumpur, and by working together with new shareholders (Hua Yang), we are hoping to unlock the value of these parcels of land, and realise the investments for Hua Yang.

“The new investment allows us to tap into [the] mid to high segment and Klang Valley segment more meaningfully,” said Ho, who holds an executive directorship position in Magna Prima.

Hua Yang’s net profit for the financial year ended March 31, 2017 fell 45% to RM60.74 million from RM110.07 million a year earlier, as revenue declined 33% to RM385.36 million from RM575.74 million due to the completion of three high-rise projects in the Klang Valley.

Hua Yang’s share price dipped one sen or 0.94% to RM1.05 yesterday, with a market capitalisation of RM373.12 million, whereas Magna Prima closed two sen or 1.31% lower at RM1.51, valuing the group at RM501.9 million.