Mah Sing Group Bhd appears to be one of the favourites of market analysts. It’s huge cash-pile, low gearing, and land banks would keep the group busy for the next eight years.
It combined land-banks at prime location stands at 2,183 acres with the total gross development value (GDV) and unbilled sales of RM30 billion which can support the group’s revenue and earnings growth for eight years.
Mah Sing broke away from its conservative style, going on an acquisition spree in the last two months, with three in Klang Valley and one in Bukit Mertajam with a combined GDV of RM4.3 billion.
Its business focus has been in the provision of affordable housing considering its land-banks are in property hotspots such as in Greater Kuala Lumpur and Klang Valley, Iskandar Johor, Penang and Kota Kinabalu, Sabah.
The underlying philosophy of the company has always been to sell a product that would meet the customer expectations and towards that, the customer’s income profiles had to be taken into consideration.
“We have always been providing houses that we think meet the expectations of the consumers although the word affordable has been a recent household name by the government in view of the escalating prices especially in the Klang Valley area,” its chief executive officer Ho Hon Sang told Malay Mail.
In tandem with that, Mah Sing plans to acquire more land-banks in the Klang Valley to 75% from the current 67% in the next two years with the view that the land acquired had to be strategic, priced fairly and have favourable terms.
With a business proposition that is sound and a management that keeps its nose to the grindstone, an analyst in a research house said that Mah Sing appears to “have a clear vision” of its future trajectory.
Ho stressed that the group was grounded and centred on its core business activity, which was in the provision of affordable housing, and was not likely to deviate from its core activity.
However, he would not rule out the possibility of venturing abroad, provided the conditions were favourable, but only after having fulfilled the local requirements mainly in the provision of property in hot spots such as in Klang Valley.
“We would look into the possibility of venturing into countries such as Australia, England and other countries in Europe, but at the moment we will continue to focus our business activity at home as this would keep us busy for the next eight years,” Ho said.
A notable feature of the company is that it has unveiled a logo that suggests that there is a radical shift in the way employees work by stressing that the well being of the employees is paramount.
This would become paramount with a high percentage of millennials in its workforce, and with people spending more time at work than at home, efforts are made to make the office as comfortable as the home.
“One initiative is to create a vibrant environment is renovating its headquarters in Wisma Mah Sing.
“The design philosophy features various modern layouts that appeal to millennials, such as an open space concept, fun meeting rooms, collaborative breakout areas and colourful pantries to encourage an innovative mindset and conducive work environment,” Ho said.
It appears that Mah Sing has struck the right chord in satisfying customers through satisfying its employees for it believes that a happy worker is a productive worker.
Its success is clearly evident with a cash pile of RM923.8 million and the group have low gearings which are reflective of the ability of the company to develop land and sell its developments quickly.
To finance its expansion plans, Mah Sing has increased its borrowings by up to RM1 billion although its impact on gearing would be minimal.
Its current gearing is at 0.02x and the developer has an internal policy not to exceed 0.5x.
This suggests that its gearing would have a minimal impact on the company’s bottom-line.
Its huge cash pile could be used for acquisition and joint ventures that are likely to bolster its earnings.
By Sathish Govind: firstname.lastname@example.org & KazI Mahmood. This article first appeared in Malay Mail Money print edition.