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KUALA LUMPUR (Sept 6): Paramount Corp Bhd intends to hold up to a 30% stake in the consortium that is bidding for one of five digital banking licences which Bank Negara Malaysia (BNM) will be granting next year. 

Speaking at the virtual briefing, Paramount group chief executive officer (CEO) Jeffrey Chew noted that each member of the consortium would hold up to a 30% equity stake in the event that it manages to acquire a licence from the central bank.

Asked if Paramount would eventually increase its stake in the venture, he said that it would be difficult to go beyond a 30% stake given BNM’s rules under the Financial Services Act which does not allow one party to have more than 30% control.

To recap, other members in the consortium are Star Media Group Bhd, RCE Capital Bhd, Prosper Palm Oil Mill Sdn Bhd and a technology partner which has not been revealed to the public.

Chew explained that the technology partner in the consortium had requested to keep “a low profile”, assuring that the company has relevant experience in the digital banking segment.

He highlighted that each member of the consortium had their roles to play — Star Media’s capabilities as a media house for advertising and branding; RCE Capital’s financial stability and track record; and Prosper’s involvement in the agriculture and food sector where Chew said there are lots of gaps in the underserved and unserved segment.

Paramount, on the other hand, brings its fintech experience to the table by virtue of its 30% stake in peer-to-peer (P2P) lending platform Fundaztic, he added.

BNM will announce the list of winners of the five digital banking licences in the first quarter of next year (1Q22).

For the foreseeable future, Chew said property development will remain as the main core business of Paramount. 

He also noted that the group’s financial performance would be hampered in the subsequent quarter amid the Covid-19 pandemic and the ensuing lockdowns.

“We do see ourselves expanding regionally, doubling up every three to five years if the market is good for the property business. It may not be the most profitable business in Malaysia, but it is profitable if you do it right,” he said.

In terms of launches in the second half of 2021 (2H21), about 68% or RM646 million of its launches comprise high-rise projects, while the remainder would be made up of landed projects.

About 43% of these launches are new projects, while the rest are launches under existing projects. In total, the group expects to launch projects worth RM944 million in gross development value (GDV) in 2H21.

Paramount was half a sen or 0.6% higher at 79 sen at today’s noon market break, giving a market capitalisation of RM489.17 million.

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KUALA LUMPUR: Property developer, Paramount Corporation Bhd, expects to achieve better sales performance in the second half of this year (2H2021) compared with 1H2021 as lockdowns to curb the COVID-19 pandemic eases and the vaccination rate rises.

Group chief executive officer Jeffrey Chew Sun Teong said the group has more ongoing property development projects in 2H2021, consisting of residential houses in Batu Kawan, Penang and the Kuala Lumpur city centre, as well as in Kemuning Utama and Bukit Banyan in Sungai Petani, Kedah.

However, he noted that the company’s performance in the third quarter of 2021 (Q3 2021) would be tempered by the Enhanced Movement Control Order (EMCO) that was imposed in Selangor in July, which resulted in work being halted at five of its project sites.

“As the lockdown is gradually easing, we hope to sustain a stronger sales momentum.

“By next year, when most Malaysians have been vaccinated, things will normalise and I think more people will start to consider buying properties, and sentiments will somewhat improve in 2022,” he said during the virtual briefing on the group’s 1H2021 results today.

Chew said the low interest-rate environment and the stamp duty exemption under the Home Ownership Campaign (HOC) would also remain crucial to incentivise property purchases.

The group’s property sales in 1H2021 grew 62 per cent to RM309 million from RM191 million in the same period last year, driven by steady demand from the sale of existing as well as new products from an existing project.

As of June 30, 2021, the group has close to RM250 million in cash and maintained sufficient banking facilities to fund its operations, as well as unbilled sales of RM1 billion, which is expected to provide some visibility to the group’s cash flow in the next two to three years.

Its undeveloped land stood at 223.02 hectares (ha), comprising 75.91ha in Klang Valley and 147.10ha in Kedah and Penang as of June 30, 2021.

Meanwhile, commenting on discounts given on completed properties, Chew said it is not likely that developers would give 30-50 per cent discounts to buyers amidst the slowdown in the property market.

He said Paramount would give normal discount rates and provide some additional finishings, but would not offer discounts of as much as 50 per cent.

“This is because properties would still have value over time and do not become obsolete so easily,” said Chew.

For Q2 2021 ended June 30, 2021, the group recorded a net profit of RM1.62 million compared to a net loss of RM4.01 million in Q2 2020.

Revenue grew by 98 per cent to RM127.4 million against RM64.2 million previously. – Bernama

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