Written by Financial Daily
Tuesday, 01 November 2011 11:37
Incorporated in 1991, Mah Sing Group Bhd is one of Malaysia’s
leading developers. With numerous international and domestic awards, the
group has established a strong brand in medium to high-end landed
residential properties, commercial projects including office buildings,
shops, retail and SoHo as well as industrial projects. It also has a
profitable plastic business, which was the original core business of the
group before it diversified into property development. The group has
about 34 projects across Malaysia.
Group managing director and
CEO Tan Sri Leong Hoy Kum shares with The Edge Financial Daily his
strategies and dreams for the company.
TEFD: What are the group’s competitive strengths and advantages?
Leong: Our
competitive strengths include being versatile, having a strong brand,
being innovative and being able to cater for various market segments.
• Versatility.
Mah Sing is one of the few developers in Malaysia to offer a wide range
of products comprising residential (catering for a wide range of
customers, from medium to high-end developments, both landed and
high-rise with built-up areas from 500 square feet), commercial (office,
retail and shops) and industrial properties. Our wide ranging product
offerings help the group identify and roll out different products in
different phases of the economic cycle (see table).
• Quick turnaround strategy. The
group ensures a short period between land purchases and launches for
fast cash flow generation to maximise shareholders’ return.
• Strong research and development team. We conduct in-depth study of market needs.
The team is able to identify new trends that appeal to the market. For
instance, in the residential segment, we identified the trend and appeal
of superlink, semi-detached and bungalow developments in a
gated-and-guarded environment with facilities. In the commercial space,
we popularise en bloc sales in the primary market (The Icon Jalan Tun
Razak — West Wing and East Wing, and Apex Tower, Southgate). For the
industrial segment, the group identified the opportunity for niche
semi-detached industrial properties in the Klang Valley which resulted
in the brisk sales for our iParc 1, 2 and 3
• Strong branding.
The group has built a strong brand name over the years, delivering
quality products on a timely basis that meet the needs of end buyers.
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| Leong is inpired by Li Ka Shing and aims to make Mah Sing the Cheung Kong of Malaysia one day. |
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• Quality and services. Mah Sing has a strong quality control and quality assurance team that ensures all our projects meet and exceed stringent quality standards. We are also adopting international best practices in ensuring quality and have sought CONQUAS (Construction Quality Assessment System) certification by BCA Singapore (Building and Construction Authority) for all new residential projects. We also have the distinction of being the first and only developer accorded the CONQUAS award for an office building in Malaysia, namely The Icon Tun Razak which was completed in 2009.
• Strong balance sheet and earnings sustainability. We had low net gearing of 0.32 times as at March 31, 2011. This provides us with the capacity to gear up for landbanking. Our present combined remaining gross development value and unbilled sales are about RM14 billion which should provide earnings sustainability for another five to seven years.
• Geographical diversification. Domestically, Mah Sing has developments in the three main growth corridors of the Klang Valley, Johor and Penang. It is also looking at opportunities abroad in China, Vietnam, Singapore and Australia.
What are the group’s achievements in the past four years?
Our revenue doubled from RM573 million in 2007 to RM1.11 billion in 2010, while net profit increased nearly 50% from RM81 million in 2007 to RM118 million in 2010. Our number of projects nearly tripled, from 13 projects in 2007 to 34 in 2011. We have maintained a consistent dividend payout of a minimum of 40% of net profit since 2006. Mah Sing has garnered both local and international awards and accolades for its projects as well as recognition for its performance as a leading property developer.
How is the group positioning itself within your industry? What are your strategies to grow or gain market share?
Mah Sing is a premier lifestyle developer and our expertise is in innovative product development, high quality finishing and timely delivery of products that surpass our buyers’ expectations. We are also one of the very few developers in the country to offer a full and complete range of properties, namely residential, commercial and industrial products. Hence, we are positioning ourselves as a one-stop centre where properties are concerned.
We will continue to offer properties in good locations, with concepts and designs that meet buyers’ needs. In 2007, we achieved sales of RM727 million and doubled that to RM1.5 billion in 2010. Moving forward, we aim to gain more market share, starting with a RM2 billion sales target for 2011.
We are committed to raising the bar to continuously improve our concepts, designs and also strive to create iconic buildings and developments. We will also continue to run our business well, grow our revenues, profits and returns to shareholders, as well as adopt good corporate governance.
What are the group’s plans for the future?
In the coming years, the group will proceed with its three-pronged strategy. We will continue with our niche, quick turnaround development model for our residential, commercial and industrial series as it is profitable and cash-generative. With our low net gearing, we target to acquire a large tract of strategic land bank over the next two years. In the future, we shall explore overseas expansion to drive future earnings growth.
What is your dream for your company? How would you like to see it in 10 years?
My vision is to be a regional developer. We would like to continue with our branding locally and hopefully someday, our brand will penetrate other parts of the world. This is what we wish for as we are looking at bringing value to the house buyers, improving the quality of life and enhancing their lifestyles. We are a dynamic company and seek continuous improvement. Ultimately, we want to leave a legacy of excellence.
I am inspired by business luminaries like Li Ka Shing and aim to make Mah Sing the Cheung Kong of Malaysia one day.
This article appeared in The Edge Financial Daily, November 1, 2011.
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