MQ Technology to diversify into property development

• The group said its wholly-owned unit Star Acres Sdn Bhd is planning to acquire 7.155 acres of land in Klebang, Melaka for RM19.5 million from Cash Support Sdn Bhd to undertake a property development with an estimated gross development value of RM275 million.

KUALA LUMPUR (Jan 26): Industrial mold manufacturer MQ Technology Bhd (MQ Tech) has proposed to diversify into property development.

The group said its wholly-owned unit Star Acres Sdn Bhd is planning to acquire 7.155 acres of land in Klebang, Melaka for RM19.5 million from Cash Support Sdn Bhd to undertake a property development with an estimated gross development value of RM275 million.

“Upon completion of the proposed acquisition, the group intends to undertake a proposed property development on the property of two blocks of 27-storey serviced suites with a total of 1,000 units and 80 units of shoplots,” MQ Tech said in a bourse filing.

The group said the property business will enable it to broaden its revenue base and generate recurring rental income in future, with contribution from the property segment to the group’s net profit being 25%.

This, it said, could reduce the group’s dependence on its challenging manufacturing business, due to increasing competition from existing industry players.

For the 18-month financial period ended June 30, 2020, MQ Tech recorded a net loss of RM12.62 million on revenue of RM12.645 million. For the 15-month financial period ended Sept 30, 2021, the net loss was RM1.36 million on revenue of RM10.65 million.

MQ Tech intends to file its proposed development plans to the relevant authorities in the third quarter of this year. Meanwhile, the planned development is expected to start in the first quarter of 2025 and be completed within three years.

The exercise is expected to be funded through a combination of the group’s internally-generated funds, bank borrowings or other equity fundraising exercises.

At market close on Thursday (Jan 26), MQ Tech shares were up 10% at 5.5 sen, giving the group a market capitalisation of RM68.81 million.