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Malaysian developer mulls Vietnam investment as home sales slow
Mah Sing Group Bhd., Malaysia’s fifth-biggest developer by revenue, is considering a Vietnam venture worth more than US$310 million for its first step overseas as a sagging home economy slows the company’s sales.
“You need to diversify your earnings stream by going overseas,” Group Managing Director Leong Hoy Kum, 50, said in an interview in Kuala Lumpur Tuesday.
“We can’t depend only on Malaysia for our growth. The foreign market is a must.”
Vietnam was Mah Sing’s priority as the “overheating” in its economy provides opportunities to buy land more cheaply, Leong said.
“We won’t simply venture into a country without a good reason,” he said.
The company is examining a joint-venture to build homes on 300 – 500 acres (120-200 hectares) of land in Ho Chi Minh City, he said.
It may later build offices at a separate location there.
Ong Chee Ting, an analyst at Aseambankers Malaysia Bhd., said Vietnam’s “long-term growth story looks quite decent, looking at the very young population and the housing requirements.”
“The overheating could slow the pace of development for the next two years or so.”
Mah Sing, which cut this year’s revenue forecast by half because of rising building costs and Malaysia’s slowing economy, is looking to expand across Asia to almost triple sales within five years to as much as 1.5 billion ringgit ($458 million).
Its stock has tumbled 25 percent this year, faster than the benchmark Kuala Lumpur Composite Index’s 22 percent slide.
The company was exploring India, China and Indonesia, Leong said, adding overseas sales will account for 20 – 30 percent of the group’s total in the next five years.
Thanhnien
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