PETALING JAYA: Paramount Corp Bhd (PCB) is expected to sustain multi-year growth with property sales, asset monetisation and investment in digital enterprises as the catalysts.
“With record unbilled sales of RM1.2bil and annual property sales of over RM1bil from financial year 2022 (FY22) onwards, the group is expected to post a core earnings compounded annual growth rate (CAGR) of 42% for FY21 to FY24,” said TA Research in a report.
As at June 30, 2022, PCB has a remaining land bank of about 500 acres, which is estimated to have a gross development value (GDV) of RM6.7bil.
“This does not include four land acquisitions totalling 125 acres that are pending completion, which management guides for a potential GDV of RM1.8bil,” said the research house.
In terms of property sales, PCB has set a sales target of RM1bil for FY22, a 24% increase year-on-year, supported by new launches in the pipeline.
“This is underpinned by new launches worth RM1.3bil, a 48% increase over last year. Of the RM1.3bil property launches planned, 32% or RM408mil would be from the group’s existing projects in Sungai Petani and Sepang.”
TA Research said the group has also outlined property launches worth RM872mil for its new developments in Shah Alam, Cyberjaya and Petaling Jaya,
“From 2014 to 2021, PCB’s property sales had grown at a CAGR of 14.8%, outperforming Malaysia’s primary market residential property transactions that had contracted by 2.1% over the same period,” it said.
For the first half of 2022, the group posted RM452mil in new sales, attributable to better take-up rates for ongoing projects. Property sales during the period made up 43% of the group’s full-year sales target.
TA Research also projected PCB’s losses in its co-working segment to narrow in FY22 to FY23 and turn around in FY24, having a seat occupancy of up to 70% from its current 50%.
Another catalyst for PCB’s growth momentum is asset monetisation. Presently, TA Research projects that the group is looking to monetise RM700mil worth of assets.
This includes the group’s proposed disposal of its remaining stake in the K-12 education business. In PCB’s announcement, the proposed disposal is for a total cash consideration of RM120mil and is expected to be completed by the end of the fourth quarter of this year.