Mah Sing Group Bhd has set itself a sales target of RM3.43 billion for 2015 and it is confident of achieving this number. Their focus? AFFORDABLE homes with their focus primarily within the Klang Valley. As at April 22 2015, the total sales has hit RM761 million. Using this number as base, Mah Sing may not hit its target but Mah Sing said that the major reason they are confident is because of its product mix in the right locations and attractive pricing. 67 percent of sales would be contributed by the Greater KL and Klang Valley while Johor would contribute 20 percent followed by Penang at 11 percent and Sabah at 2 percent.
Mah Sing’s founder and managing director, Tan Sri Leong Hoy Kum said that the current period of consolidation due to the Goods and Services tax would only be for a while. As soon as this adjustment period passes, the demand for properties would normalise. Currently, it is definitely harder to convert bookings into actual sales. Total expected gross development value (GDV) for Mah Sing as a group could be up to RM49 billion over a period of eight to ten years according to Mah Sing’s executive director Datuk Steven Ng Poh Seng. This is only the current number because Mah Sing plans to replenish its landbank in the Greater KL. He said that Mah Sing has no gearing and RM1.4 billion in cash. This meant it can go on an expansion plan.
What can we derive from this piece of news? Thus far, developers continue to be cautiously positive. This is especially for those who have switched their focus from their usual higher end to the current mass market. Yes, they have to put up a brave front but for some of these listed companies, there is little need to be too confident because when the targets are not hit, the share prices would suffer. In other words, if their management dares to announce it, most probably it should be achievable. My advice remains the same for first time homebuyers. The prices cannot stay stagnant forever, not when land prices are increasing even during the current slow times. Buy objectively based on what you need. Yes, hopefully I can also get one soon from the secondary market. Happy buying property or even buy the stocks from some of these developers that you believe in.
written on 26 Apr 2015
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