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Mah Sing scaling back, revising target downwards.

Mah Sing has decided to scale back its launches as well as setting a lower sales target for 2015. Instead of RM3.4 Billion worth of launches, it would only be focussing on RM2 Billion launches. Sales target is also revised downwards from RM3.4 Billion to just RM2.3 billion. I think I have to hold on to my 1,000 unit of Mah Sing shares for a better future. The reason I bought it was for the potential that it may give me a good dinner. I think now it may have to wait.
According to Mah Sing, the reason for this adjustment is because of a challenging short term environment. Do note that they said ‘short term.’ The sentiment has also been affected by the implementation of the goods and services tax and the recent weakening of the Ringgit which is now trading at a 17-year low versus the US$. The fundamental remain strong and I agree fully with their assessment of Malaysia having a young demographics. The favourable demand and supply in selected locations. (Increasing due to MRT stations). Healthy employment conditions. (Most important because no job, no need for a home in the city). Last but not least, all the ongoing infrastructure projects all over the country. (My Kota Kinabalu condo has been rented out fully furnished to a project manager of a construction project for many months now) Why fully furnished? Read here: I only rent out, fully furnished
Anyway, my 1,000 unit of Mah Sing’s shares should be quite safe. Mah Sing’s revenue jumped to RM780.48 million for Q2 2015 compared to RM705.01 million in the same corresponding quarter a year ago. Note that I say ‘jump’ because this is indeed a challenging period and it has started slowing for over a year already. Thus, the results show good resilience. Net profit is up too. It is at RM189.38 million based on a revenue of RM1.56 billion.  This gives it a net margin of 12 percent. Not an awesome number but still double digits. Read another recent report on net margin here: First six months, SP Setia’s net profit margin at 12.83%  It currently has a cash pile of around RM1.54 billion. This is a very healthy number and should give it flexibility to pursue any attractive land acquisitions in the near future. Bad times are a great time to buy land. With its current landbank, it still has an estimated remaining gross development value of RM26.4 billion which gives it lots to do within the next six to eight years. Happy waiting, for me.
written on 29 Aug 2015
Next suggested article: Hua Yang’s FY15 net profit margin at 18.95%

Property Investment always start with knowledge. Equip ourselves with more here.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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