KUALA LUMPUR (Sept 22): TAFI Industries Bhd, the furniture maker which has diversified into property development, has entered into five joint-venture (JV) agreements to develop mixed housing projects in Pahang with an estimated total gross development value (GDV) of RM621.5 million.
For all five JV projects, TAFI’s wholly-owned subsidiary Gerak Mahir Sdn Bhd (GMSB) will be bearing the cost of the development, while the JV partners will be providing the project land, the group said in a statement to Bursa Malaysia.
The total consideration will be split 50:50 between GMSB and the respective JV partners, said TAFI.
Of the JV developments, the venture with Jaringan Fajar Sdn Bhd (JFSB) has the highest estimated GDV of RM177.8 million. It involves jointly developing semi-detached houses on a land measuring 61.76 acres (about 25 hectares) in Bukit Pelindung, Kuantan.
Meanwhile, TAFI entered into two separate JV agreements with Pembinaan Alamku Sdn Bhd (PASB) for the development of terrace houses and shops.
The first involves 125 acres of land in Chendor with a GDV of RM142.9 million, while the second is in Kampung Baging, Kuantan with a GDV of RM148.4 million.
TAFI also entered into a JV with Pembinaan I-One Sdn Bhd to jointly develop terrace houses, shops and commercial plots over land measuring 80.7 acres in Mukim Penor, Kuantan.
The smallest project by GDV is a JV with Kotamas Development (M) Sdn Bhd, estimated to be RM31.3 million. This involves the development of terrace houses and shops on 32.5 acres of land in Mukim Kuala Kuantan.
TAFI made its debut on the property development scene in 2020 through a mixed development property development project in Habu, Cameron Highlands.
In today’s statement, TAFI group chief executive officer (CEO) Datuk Seri Wong Sze Chien said revenue from the group's property development segment is expected to start coming in from 2022 from the Habu project with a GDV of RM390 million.
Meanwhile, TAFI today reported its financial performance for the second quarter ended June 30, 2021 (2QFY21), where it narrowed its net loss to RM744,000 from RM1.31 million a year ago, as the group saw higher export sales of furniture.
Quarterly revenue rose 8.2% to RM5.91 million from RM5.46 million.
Wong said buyers overseas are facing shortages of containers, while shipping cost has increased significantly.
“Despite the higher shipping cost and operation lockdowns, furniture orders remain on track from overseas markets for the TAFI group to deliver a profit for the financial year ending Dec 31, 2021 (FY21),” he said.
The group also said that local market retail and contract sales for its furniture segment are increasing and expected to contribute a significant portion of the group’s revenue due to the tendering of government and non-government furniture contracts as well as through its strategic partnerships with Signature Group and OMG Free Reno Sdn Bhd.
TAFI had gained 252% from 63 sen at the start of the year to RM2.21 at the time of writing today. Its share price hit a peak of RM2.94 on Sept 15 and trended downwards since then.
Later at 5pm, TAFI's share price settled 30 sen or 11.41% lower at RM2.33, valuing the company at RM289 million.
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