Mah Sing interested in RRI land

KUALA LUMPUR: Mah Sing Group Bhd is keen on taking part in the development of the much-coveted Rubber Research Institute of Malaysia (RRI) land measuring 2,200 acres (880ha) in Sungai Buloh, Selangor.

“Mah Sing is interested to participate in the tender. It is one of the last pieces of large prime residential and commercial land in Selangor.

“We will definitely look into this joint venture and available land for sale,” said Mah Sing group managing director and group chief executive Tan Sri Leong Hoy Kum after the company AGM yesterday.

The Edge Financial Daily recently reported that the Employees Provident Fund is set to complete the acquisition of 2,200 acres of RRI land, which is located in close proximity to the proposed mass rapid transit line, from the federal government by the end of this month. The acquisition is said to carry a value of over RM2 billion.

Mah Sing currently has an undeveloped landbank of 1,531 acres with an estimated gross development value (GDV) of RM15.6 billion. Leong said the group is still looking to acquire more land.

“Don’t look at the number of acreage [we have currently], look at how much value we can extract per acre of land. As you know, most of our land is in prime locations.

“We are looking for more land for long-term growth. We are selective in buying land. Location is very important in this business besides our concept and branding,” he added.

Leong did not discount the possibility of the group looking for land in Perak, Melaka and Kedah as he believes these are states with high catchment.

However, he pointed out that Mah Sing would not deviate its focus from the hotspots — Greater KL region, Penang, Johor Baru and Sabah with greater emphasis on the Klang Valley where the “action” is.

The RRI land in Sungai Buloh is said to be located in close proximity to the proposed MRT line.

On overseas land acquisition, Leong said, “At the moment we are doing well in Malaysia. Of course, we are exploring opportunities but not in the near future. There are plenty of opportunities in Malaysia.”

According to its 2011 annual report, the group’s cash and bank balances stood at a healthy RM665 million as at the end of last year. Mah Sing has borrowings amounting to

RM705.5 million plus redeemable convertible secured bonds of RM268.3 million.

On Bank Negara’s responsible lending guidelines, which have hit hard several developers, Leong said Mah Sing’s property sales were not affected.

“A majority of our property buyers are first time homeowners and upgraders, not speculators. For our landed properties and service apartments, investors only account for less than 10% and 30% respectively.

“Investors are not speculators. For them to come up with 30% for their third property is not an issue because over the last couple of years, especially after the 1997 financial crisis, they are more careful and they have low gearing,” said Mah Sing executive director Steven Ng.

With Mah Sing having achieved  RM1 billion of sales to date, research houses USB Investment Research and Kenaga Research believe it is on track to meet its RM2.5 billion sales target set for 2012. Leong said Mah Sing would be able to exceed the RM2.5 billion target by end-2012.

The group recorded a net profit of RM59.9 million for its 1Q ended March, up 45.5% from a year ago while revenue rose to RM457.78 million, up 47% from a year ago.

Mah Sing’s share price has been hovering between RM1.80 and RM2.20 over the past few months. The stock ended at RM2.04 yesterday, down five sen.