Mah Sing 4Q profit climbs 49% on-year; proposes 2.65 sen dividend

KUALA LUMPUR (Mar 1): Mah Sing Group Bhd registered a 49.02% jump in net profit for the fourth quarter ended Dec 31, 2021 (4QFY21), to RM40.01 million from RM26.85 million a year ago, contributed by its property development and manufacturing segments.

Quarterly revenue rose 13.67% year-on-year (y-o-y) to RM537.42 million from RM472.78 million. The company proposed a first and final dividend of 2.65 sen per share, which is equivalent to a 4% dividend yield based on its closing price of 66 sen on Feb 24.

For the full financial year ended Dec 31, 2021 (FY21), Mah Sing’s net profit surged 70.51% y-o-y to RM160.86 million from RM94.34 million, with revenue rising 14.58% to RM1.75 billion from RM1.53 billion.

In a statement, Mah Sing said its new property sales for FY21 at RM1.6 billion — up 45% from RM1.1 billion in 2020 — have returned to pre-pandemic levels. It is even an increase from 2019's RM1.5 billion sales.

"The growth was driven primarily by strong execution, the success of the M-series of affordably priced projects, and effective digital marketing initiatives," the group noted.

In FY21, Mah Sing said its property development segment recorded operating profit of RM259.7 million on the back of revenue of RM1.34 billion, which were higher by 64% and 13% respectively than the operating profit and revenue recorded in previous year.

This was mainly driven by higher property sales and revenue recognition of property projects under construction coupled with the finalisation of construction costs for certain construction contracts. The improved operating profit was also supported by lower administrative and marketing and selling expenses, thanks to the use of cost-effective digital marketing platforms.

Its manufacturing segment, however, fell into an operating loss of RM8.5 million — as opposed to an operating profit of RM15.9 million in FY20 — though revenue rose to RM370.3 million from RM288.2 million on higher sales of plastic pallets and automotive parts.

While glove sales also contributed to the increased manufacturing revenue, its glove plant's pre-operating expenses resulted in the operating loss. "The plant’s operation and line installation were also further affected by the government-mandated operating restrictions during EMCO [Enhanced Movement Control Order] and NRP [National Recovery Plan],” said Mah Sing.

Meanwhile, the group's hotel segment recorded an operating profit of RM30,000 — as opposed to an operating loss of RM14.6 million a year ago, when the group booked impairment charges of about RM10.2 million.

Mah Sing targets RM2b new property sales in 2022

As the economy recovers, the group targets a 25% increase in new property sales to RM2 billion for 2022.

“Price points will be attractive, with 60% of properties below RM500,000 and 94% below RM700,000. A strong pipeline of 21 projects will support 2022 sales growth and planned new launches include M Senyum in Sepang, M Astra in Setapak, M Nova in Kepong, M Panora in Rawang, remaining phases for Ferringhi Residences in Penang, and double-storey link homes in Meridin East, Johor Bahru,” said Mah Sing's founder and group managing director Tan Sri Leong Hoy Kum.

He said Mah Sing is optimistic that its properties will continue to gain traction among buyers due to their strategic locations, affordable price points, and well-designed features.

As at Dec 31, 2021, Mah Sing has unbilled sales of RM1.9 billion.

“With the good rate of work, the group is targeting an even higher rate of vacant possessions in 2022, further generating healthy cash flow. With our strong balance sheet, we are constantly on the lookout for new land, with a focus on strategic land banks in Greater KL, Klang Valley, Penang, and Johor that are ideal for affordable products,” Leong said.

The group is also scouting for attractively priced lands outside of Klang Valley, such as Seremban, Malacca and Perak, for projects in the affordable range, he added.

Mah Sing shares closed half a sen or 0.74% lower at 67.5 sen on Monday, for a market capitalisation of RM1.64 billion.

Edited by Tan Choe Choe

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