1. 1
SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN
Bachelor of Quantity Surveying (Honours)
FINANCIAL MANAGEMENT ASSIGNMENT
(FIN 60203)
GROUP MEMBERS:
HONG KAI YIN 0323361
LAU CHIN SHENG 0317899
MICHAEL CHANG VUI LOONG 0319198
WELSON LUM WEI JIUNN 0319514
YONG SING YEW 0318766
2. 2
Table ofContent
Content Page No.
1.0 Introduction 4-10
1.1 Milestones
1.2 Vision & Mission
1.3 Iconic Series
1.4 Awards & Recognitions
1.5 Board of Directors
2.0 Principal Activities 11-13
2.1 Community
2.2 Internal Workplace
3.0 Revenue Contribution ofdifferent segments 13-17
3.1 Conclusion for Revenue Contribution
4.0 Evaluation of current state ofmain industry 17-19
4.1 Current Size of the Market
4.2 Prospect of Future Growth
4.3 Challenges faced by the Industry
5.0 Analysis ofthe company’s strength and weaknesses 19-21
5.1 Strengths
5.2 Weaknesses
6.0 Strategic plans for seizing opportunities and for facing challenges 21-23
7.0 Major capital investments and major sources offunding 23
3. 3
8.0 Trends ofthe company 23-42
8.1 Liquidity
8.2 Activity
8.3 Debt
8.4 Profitability
8.5 Market Performance
8.6 Ratios for the company
9.0 Conclusion 43
10.0 Appendices 44-57
11.0 References 58-59
4. 4
1.0 Introduction
Mah Sing Group Berhad, one of the very well-known property developer which is
headquartered in Kuala Lumpur, Malaysia. The company was established in 1965, and it’s founded by
Leong Hoy Kum. In 1965, a group called Man Sing Plastic Industries Sdn. Bad. (MSPI) which is one
of the largest high-tech plastic manufacturers in Malaysia and Indonesia has been founded. Below is
the timeline of their achievement starting from year 1992.
1.1 Milestones
During the year 1992, Mah Sing Group was listed on the Kuala Lumpur Stock Exchange (KLSE) 2nd
Board under the industrial sector.
1994, the birth of i-Parc series,as known as,Mah Sing’s Industrial integrated park.
2000, Mah Sing Group launched the maiden township development in Sri Perdana in Skudai, Johor and
introduced the concept of gated and guarded living for link homes in Johor, so it was reclassified from
industrial sector to property sector on KLSE 2nd Board.
2004, the Group shifted its focus to medium upper to high end markets in Klang Valley and launched
first niche high-end project, it also acquired land for its 1st township in Klang Valley, Aman Perdana.
Furthermore, the group has been transferred from 2nd Board to the main Board of Bursa Malaysia.
2007, Mah Sing Group ventured into Penang and launched Southbay City, Not only that, they also
expended themselves into commercial properties with The Icon, Jalan Tun Razak.
5. 5
2009, the Group continued the i-Parc series industrial developments with i-Parc 1, 2 and 3 in Klang
Valley. They keep on expanding their presence to Southern Klang Valley with garden Residence,
Cyberjaya and Kinrara Residence, Puchong.
2011, they did more township development in Klang Valley with M Residence in Rawang.
2012, this year was a huge step for Mah Sing Group, as they expended into Kota Kinabalu, Sabah with
Sutera Avenue, and launched Southville City@KL South in Bangi.
2013, the Group further strengthened its foothold in Klang Valley with developments such as Lakeville
Residence in japan Kuching, and Damansara Sentralin Sungai Buloh.
2016, the Group launched its largest township by acreage,Meridin East in Iskandar Malaysia Johor,
spanning 1,313 acres.
In year 2017, Mah Sing Group has launched their new corporate logo.
1.2 Vision & Mission
Mah Sing Group Sdn. Bhd. has a strong vision, that is “Inventing Future Living That Enhances
Quality of Life”. Currently, they have four missions, which is stated as below.
• EMPOWERINGour people towards personal and professional growth through continuous learning
• Anticipating future MARKET TREND and provide the right solutions
• Delivering our QUALITY PROMISE
• CARINGfor the people, community and the environment
• 1.3 Iconic Series
6. 6
Icon City, its structure is inspired by the chiseled characteristics of mountain rocks. It features
state-of-the-art infrastructure and architecture; elements infused with landscaping in the form of forest
and water themed plazas, a sky pool and a roof garden.
The Icon, it is located at Jalan Tun Razak boasts a design that creates a modern and dynamic
building which further accentuates the overall image of the surrounding area. The 20-storey Grade A
building made history when it became Malaysia’s first sale of a commercial property.
7. 7
M City, it is conceived for garden city living within a finely crafted architecture. It is the first
development in Malaysia to have multi-level thematic having gardens. Located at Embassy Row,Jalan
Ampang, it has a one-of-a-kind facility deck dubbed the Altitude Club which houses world class
recreational and business facilities.
Icon Residence, it takes its architectural inspiration from the Mediterranean. Often described
as a luxury garden terrace in the sky, Icon Residence is surrounded by a network of highways for easy
and convenient access.
8. 8
1.4 Awards & Recognition 2016 - 2017
• Social Media Excellence Awards - Best in Lifestyle Development
• Asia Recruitment Awards 2016 - Bronze in Best Employer Brand Development
• StarProperty.my Awards - Top Ranked Developer of the Year 2017
• BCI Asia Awards 2016 - Top 10 Developers
• Property Insight Prestigious Developer Awards 2016 - Top 10 Developers
• Asset Triple A Islamic Finance Awards 2016 - Best Hybrid Sukuk
• 2016 Frost & Sullivan Excellence Awards - Competitive Strategy, Innovation and Leadership in
Property Development
• The 6th Asian Excellence Awards - Asia’s Best CSR
• The 6th Asian Excellence Awards - Best Investor Relations Company
• Malaysia Best Employer Brand Awards 2016
• Asia Best Employer Brand Awards 2016
• Worlds Finance Real Estate Awards - Property Company of the Year 2016 (Asia)
• South East Asia Property Awards (SEAPA) - SpecialRecognitions in CSR
• Sin Chew Business Excellence Awards - Property Excellence Award - CSR Excellence Award
• National Annual Corporate Report Awards (NACRA) 2016 - Certificate of Merit
• Malaysia Property Press Awards 2016 - 2017 - Developer of the Year
• iProperty.com People Choice Awards - Developer of the Year 2016
• The Edge Malaysia Property Excellence Awards 2016 - The Edge Top Property Developers Awards
9. 9
1.5 Board ofDirectors
From Left to Right:
Mr Loh Kok Leong - Independent Non-Executive Director
Ms Leong Yuet Mei - Executive Director
Datuk Ho Hon Sang - Chief Executive Officer
Jen. Tan Sri Yaacob Bin Mat Zain (R) - Chairman / Independent Non-Executive Director
10. 10
From Left to Right:
Tan Sri Dato’ Sri Leong Hoy Kum - Group Managing Director / Group Chief Executive
Dato’ Steven Ng Poh Seng - Executive Director
Captain Izaham Bin Abd. Rani (R) - Independent Non-Executive Director
Ms Jane Leong Jheng-Yi - Alternate Director to Tan Sri Dato’ Sri Leong Hoy Kum
11. 11
2.0 Principal Activities
2.1 Community
Mah Sing Group Sdn. Bhd. believes that sharing its success with the community by further
providing quality products and building sustainable townships. Mah Sing Group endeavors in reaching
out and giving back to the community, especially the underprivileged group. They play a major role in
community development by providing support to those underprivileged in need of medical, educational
and living assistance. The Group have been contributing to the community via Corporate Social
Responsibility (CSR) program and other initiatives.
Mah Sing Group strongly advocate the importance of education and believe that students
deserve the best opportunities. Until the end, they started and will continue to support scholarship
program, as well as offering subsidies to needy student, providing school building funds and enhancing
school facilities. The Group contributes monetary to DAYBREAK,which supports social enterprises
to train and create employment opportunities for the disable. Man Sing also donates monetary to Kuen
Cheng High School as redevelopment fund. Not only these, they also donate to SJK(C) Pin Hwa 2
building funds, and contributes tables and chairs for SMK Dao Abdul Rahman Andak.
Mah Sing Group aims to provide financial support to those suffering from illness and
disabilities, and also directly assist in public welfare by supporting medical initiatives like blood
donation campaign. Man Sing Group contributed monetary to MERCY Malaysia for its Cleft Lip and
Palate Program in Myanmar, and Tunku Laksamana Johor Cancer Foundation’s (TLJCF) as a support
in improving the livelihood of underprivileged cancer patients in Johor.
They also aim to raise the standards of living for both the poor and the disabled. Man Sing
Actively provide financial assistance and contribute towards relief schemes for the poor and distress.
To make this successful, they contribute monetary to Incitement to support their Liter of Light project
that saw the installations of sustainable lights around the orang Asli village in Cameron Highlands. On
the other hand, Man Sing Group also contributed monetary to support the activities organs by the
Malaysia Mental Health Association (MMHA).
12. 12
Since Mah Sing believes in hosting social and sporting activities which will enrich the
community and promote national unity. The Key annual initiatives in 2016 were the Mah Sing
Foundation Charity Dinner, orphanage visit, and festive celebrations with underprivileged children.
The dinner was themed “Better Lives Together”, and it was held at Shangri-La, Kuala Lumpur on 7th
October 2016.
2.2 Internal Workplace
Mah Sing Group is fully committed to developing their people through effective human
resource strategies, open communication and transparency. They promote harmony amongst all
employees and respect for individuals. To focus on empowering their staff towards personal and
professional growth, the Group introduced its POWER statement which stands for:
Performance First
Ownership
Well-Being
Empowerment
Resourcefulness
The Group has established Mah Sing Academy in 2016, it represents the starting point of
employee development and growth for Mah Sing Group. The purpose of it is to ensure that all
employees of Mah Sing are given the opportunity for development of skills and improvement of
knowledge through the various learning and development opportunities provided throughout out the
year.
The Academy has also produced various talent development program to build a sustainable
talent pipeline and groom high potential into successorsforkey roles in the group. They did this because
they also believe that the right talent attraction strategy is vital for attracting the best talents.
Mah Sing Group recognizes that a positive work environment is essential to the productivity of
its employees. MahSing Sports Club is established with the objective of creating a platform to promote
interdepartmental relations, health and work-life harmony. The weekly activities including Badminton,
Yoga, Futsal, Swimming, Fitness and Zumba Classes.
13. 13
3.0 Revenue contributions ofdifferent segments
2013
Based on the information extracted from MAH SING 2014 annual report, Mah Sing group had
generated a revenue of RM 2,005,596,000.00 in 2013 (Deducted elimination amount of RM
174,378,000.00). We can observe that the main segment that generate most of the revenue in this year
is from the property sector, which generated a revenue amounted RM 1,721,968,000.00 and it is
weighed 79% of overall revenue in 2013. On the other hand, plastic sector is ranked second place out
of three segments in the company, which amounted RM 235,444,000.00 and weighed at 11% from
overall revenue in 2013. Lastly but not least the investment holding and others generate a revenue
amounted RM 222,562,000.00 which consist of External revenue (RM 48,184,000.00) and Internal-
segment revenue (RM 174,378,000.00), and weighed at 10% at overall revenue at 2013.
79%
11%
10%
Revenue generates from different segments in
2013 (RM'000)
Properties Plastics Investment holding and others
14. 14
2014
Based on the information extracted from MAH SING 2015 annual report, Mah Sing group
had generated a revenue of RM 2,904,723,000.00 in 2014 (Deducted elimination amount of RM
194,329,000.00). We can observe that the main segment that generate most of the revenue in this year
is from the property sector, which generated a revenue amounted RM 2,605,849,000.00 and it is
weighed 84% of overall revenue in 2014 which increased 5% from last year 79% to 84% this year. On
the other hand, in 2014 the revenue come from investment holding and others is ranked second most
revenue generate segment in the company, which amounted RM 252,296,000.00 (RM 57,977,000.00
from External revenue and RM 194,319,000.00 from internal-segment revenue) and weighed at 8%
from overall revenue in 2014. Last but not least, the plastic segment generates a revenue amounted RM
240,907,000.00 (External revenue of RM 240,897,000.00 and Internal-segment revenue of RM
10,000.00), and weighed at 8% at overall revenue in 2014.
84%
8%
8%
Revenue generates from different segments in
2014 (RM'000)
Properties Plastics Investment holding and others
15. 15
2015
Based on the information extracted from MAH SING 2016 annual report, Mah Sing group had
generated a revenue of RM 3,108,506,000.00 in 2015 (Deducted elimination amount of RM
203,251,000.00). We can observe that the main segment that generate most of the revenue in this year
is from the property sector, which generated a revenue amounted RM 2,810,945,000.00 and it is
weighed 85% of overall revenue in 2015 which increased 1% from last year 84% to 85% this year. On
the other hand, in 2015 the revenue come from investment holding and others is still ranked second
most revenue generate segment in the company, which amounted RM 268,887,000.00 (RM
65,644,000.00 from External revenue and RM 203,243,000.00 from internal-segment revenue) and
weighed at 8% from overall revenue in 2014. Last but not least, the plastic segment generates a revenue
amounted RM 231,925,000.00 (External revenue of RM 231,917,000.00 and Internal-segment revenue
of RM 8,000.00), and weighed at 7% at overall revenue in 2015 which decreased 1% compared to 2014.
85%
7%
8%
Revenue generates from different segments in
2015 (RM'000)
Properties Plastics Investment holding and others
16. 16
2016
Based on the information extracted from MAH SING 2017 annual report, Mah Sing group had
generated a revenue of RM 2,957,617,000.00 in 2016 (Deducted elimination amount of RM
492,714,000.00). We can observe that the main segment that generate most of the revenue in this year
is still from the property sector, which generated a revenue amounted RM 2,626,784,000.00 and it is
weighed 76% of overall revenue in 2016 which decreased 9% from last year 85% to 76% this year. On
the other hand, in 2016 the revenue come from investment holding and others doubled the revenue
compared to 2015, which amounted RM 564,164,000.00 (RM 71,436,000.00 from External revenue
and RM 492,710,000.00 from internal-segment revenue) and weighed at 16% from overall revenue in
2015. Lastly but not least, the plastic segment generates a revenue amounted RM 259,401,000.00
(External revenue of RM 259,397,000.00 and Internal-segment revenue of RM 4,000.00), and weighed
at 8% at overall revenue in 2015 which increased 1% compared to 2015.
76%
8%
16%
Revenue generates from different segments in
2016 (RM'000)
Properties Plastics Investment holding and others
17. 17
3.1 Conclusion for revenue contributions
Basedon the study above,we canobserve that from 2013~2016, Mah Sing group generate their
major revenue from the property segment which average at 81% of overall revenue in this four years.
Other than that, investment holding and others is the second most revenue generate segment in these
four years which average at 10.5% of overall revenue in 2013~2016. Lastly, plastic segment weighed
at an average percentage of 8.5 for overall revenue in 2013~2016, meaning to say plastic segment is the
minor revenue generate segment for Mah Sing Group.
4.0 Evaluation ofcurrent state ofmain industry the company operates
4.1 Current Size ofthe Market
According to Mah Sing 2017 annual report, MAH SING Group managed to achieve a total of
RM 1.78 billion sales in 2016 by launched projects that consist of Tower C of Lakeville Residences in
Jalan Kuching, Tower A and Tower B of Cerrado Residential Suites, Southville City, as well as The
Greenway and The Eden which are both 2-storey Link Homes in Meridin East, Johor. Other than that,
the Mah Sing has various developments located at property hotspots across Malaysia. Majority of its
developments are residential projects and the key focus area is Kuala Lumpur where there are still
sustainable demand as a result of population & economic growth. The diagram above shown the
remaining gross development value in the way of strategic location mix and board product offerings.
We can observe that,there are 20 projects in greaterKLwhich valued at 18.9 billion, 7 projects in Johor
18. 18
at the value of 6.8 billion, 4 projects in Penang at the value of 2.9 billion and lastly, 2 projects in Sabah
which value at 1.6 billion. Moreover, 10 billion of total gross development value is categorized under
commercial which consist of shops, offices, retail, hotel, and SOVO. Furthermore, 18.8 billion for
residential type (high-rise and landed). Last but not least, 1.4 billion for the industrial project.
4.2 Prospect offuture growth
According to Mah Sing 2017 annual report, The Group further strengthened its branding with
various innovative marketing initiatives. Targeting both millennials and baby boomers, their marketing
strategy focuses on digital marketing and innovative events and campaigns. Which In fact,70% of Mah
Sing properties buyers are below 40 years old. Mah Sing’s digital marketing includes the usage of
various social media platforms and the creation of unique contents such as festive videos, online
contests and more to garner leads and increase brand awareness. Innovative roadshows and events are
planned with unique themes like Shanghai Tang, Alice in Wonderland, Monopoly and more. Aside
from giving our booths a new look at roadshows, there are also various interactive activities which
appeal to the younger audience.
4.3 Challengesfaced by the industry
According to Tee (2017), the most challenging facet faced by property industry is the first-time
homebuyers or property investor will be hard to secure a mortgage from banks due to the bankers are
currently facing a high asset to deposit ratio on top of the weakening ringgit and higher banking cost.
Hence,this will led to less funding available asbanks will be tightening their reins even furtherto ensure
that they obtain the best and safest return on investment.
Other than that, with the current economic climate, more financially-savvy working
professionals have a wait-and-see attitude, especially if developers continue to sell at the current steep
prices. Banks will also embrace a more prudent financial checks and as a result, applicants in the
borderline category who got their loans approved during better economic times will not be as lucky this
year.
19. 19
On the other hand, the secondary property market (sub-sales) is bound to be more exciting this
year. In consideration of some of these property speculators not being able to afford to service their
mortgage instalments upon completion of said properties, they will be compelled to sell off their units.
With more secondary properties entering the market, some of these speculators may have to settle for
selling prices that are lower than the original purchase price in order to secure a buyer.
The property market is now in a consolidation phase at presentand there are opportunities there
for people to invest. Initial phases of new projects with an advantageous location and connectivity,
strong master planning and delivered by reliable developers will continue to attract buyers. This is
especially for developers who have historical data that show asset appreciation over time, particularly
when the market is recovering.
5.0 Analysis ofthe company’s strength and weaknesses
5.1 Strengths
The strengths of Mah Sing Group BHD is they have worldwide awards and recognition which
were the corporate awards,plastic awards and property awards. The achievements of corporate awards
were World Finance Real Estate Awards- Property Company of the Year 2016 (Asia), Malaysia
Property Press Award 2016-2017- Developer of The Year,Asia Best Employer Brand Awards 2016,
StarProperty.myAwards- Top Ranked Developer of The Year 2017 and etc. The achievements for
plastic awards were Daihatsu- Superior Quality & Delivery Award 2015/2016 and Mitsubishi- 2015
Zero Delay Delivery Achievement. The achievements for property awards were Building and
Construction Authority Awards (BCA) 2016- Green Mark Gold PLUS Award for Ferringhi Residence,
Malaysia Property Press Awards 2016-2017- Best High Rise Developer for Lakeville Residence and
etc.
Next, Mah Sing Group BHD able to remain top pick for Macquarie. Based on The Star Online
(2016), by develop projects in the central region, Mah Sing Group BHD able to target a gross
development value (GDV) of Rm2.1bil with sales target of Rm2.3bil. 64% of Mah Sing Group BHD
development projects are located in the central region such as Southville, D’Sara Sentraland Lakeville
Residence. Only with this two projects already contribute almost 50% of financial year 2014 to 2015
20. 20
sales and Macquarie Research estimated that the Southville will continue contribute 30% to 2016-2018
sales.
Since 1st
of August 2016, Datuk Ho Hon Sang had joined Mah Sing Group BHD and became
Chief Executive Officer (CEO). Datuk Ho Hon Sang had 30 years of experience in property
development industry, consultancy, engineering, general management and road privatization.
Then, Mah Sing Group BHD also provide customer cares and services to meet their customer
satisfactions. Mah Sing group BHD offer value-added services like M Care and M Club to their
customers. M Club memberships got offered for Repeat Buyer Purchase and Buyer-Get-Buyer
incentives but for selected projects only. Post delivery services such as sub-sale, renovation, leasing,
interior design and maintenance service will provided to M Care memberships. Most importantly, Mah
Sing Group BHD constantly upgrade to improve their customer services. They will review all the
feedbacksfrom their customers by conduct customer satisfaction survey in order to improve themselves
and provide better and quality services.
After that, Mah Sing Group BHD constantly engages with its business partner to create
innovative products and services to promote systematic implementation for their business modal. They
also constantly assessed and monitored materials purchased and services provided in term of pricing,
quality, availability, time delivery, industry specific requirement and safety & health standards. During
the tender process for a project, they allowed overseas contractor to participate. This is to encourage
better competition, improve of quality, practices, business opportunity and exchange of knowledge.
Lastly, Mah Sing Group BHD not only fully committed into their core business but also
maximizing returns to their shareholders. Based on the last 5 financial years ended December 2015,
the Compounded Annual Growth Rate (CAGR) of 23% for revenue and 27% for net profit which
rewarded its investors with stable and sustainable returns.
5.2 Weaknesses
Nothing is perfectso there will be some weaknesseswhich may only a minor problems for Mah
Sing Group BHD. Based on Shen (2016), “stiff competition and soft market conditions in the property
market will pose a challenge for Mah Sing Group BHD to achieve its sales target of Rm2.3bil for the
21. 21
year based on the 2015 financial year report achieve sales was Rm1.6bil as at Sept 30” Therefore,Mah
Sing Group BHD start banking and develop on the affordable housing segment to achieve target sales
for the year. In my opinion, develop more affordable housing segment required more lands where the
central region does not have much land unless the lands located at outskirts. The housing segment
located outskirts from the city will be consider twice by de customersalthough the prices will be cheaper.
With the cheaper house to purchase an affordable house, its materials, specifications and services
provided might be slightly undergoes what expected by the customers. To conclude my analysis, the
amount of sales will be slightly not in a good conditions as planned to achieve Rm2.3bil for the year.
Next, based on NST (2017), CIMB research that there will be negligible impact on Mah Sing
Group BHD from Cabinet’s decision to freeze approvals of new properties with priced about Rm1
million. The construction firm said to be freeze is because most of its products are less than Rm600,
000 per unit and both have limited exposure in offices and retail spaces. In my opinion, this impact
happened is because of Mah Sing Group BHD may not put much considerations to the contractors and
works executed on the construction site. They put more efforts and time on managing their cash flows,
marketing, entrepreneurship and finance investments.
6.0 Strategic plans for seizing opportunities and for facing challenges
Mah Sing Group BHD had giving away 1,612 Touch’ n Go cards each loaded with Rm20 to
celebrate the new MRT serviceswhich is their projects in Klang Valley. This give awayprizes had term
& condition where the winners have to collect 2 stamps at different MRT station which are Kampung
Selamat station and any of the selected 5 stations. This is to encourage people to ride on MRT and feel
the new facilities in Malaysia which constructed by Mah Sing Group BHD (The Star Malaysia, 2016).
Next, Mah Sing Group BHD had launched a campaign named “Reinvent Affordability”. Based
on The Star Online (2017), the aim of this campaign is to develop more affordably- priced home to
carter to the market’s supply and demand gap and offer affordable residential products without
compromising the quality and facilities to the further enhance the life of homebuyers. The
implementation of this campaign is to enable more people to own their own house or property at the
same time to achieve the goals for the company.
22. 22
Based on News (2017), Mah Sing Group BHD also launched B.I.G Programme for Savanna
Lifestyle Shops in Southville City, Bangi. B.I.Gstands for ‘Business Incentive Grants’. The purchaser
of Savanna Lifestyle Shop will receive business grant up to Rm800, 000 and 2 complimentary car park
bays worth Rm25, 000 each. The aim of this programme is to help entrepreneurs and business owners
to own a quality lifestyle shop unit and at the same time have cash in hand to run their business. This
programme also part of advertisement as to pull the purchasers’ attention from other developers’
development projects so that all the shop unit at Savanna Lifestyle Shop will sold out to achieve Mah
Sing Group BHD goals.
According to News (2016), Mah Sing Group BHD had launched a financing plan name ‘Lock
and Roll’. ‘Lock and Roll’ allowed the purchasers to lock down the completed unit they wanted to buy
and slowly make payment for the first 2 years. One of the interesting about this ‘Lock and Roll’ plan is
that the purchaser only need to pay a booking fees to lock the unit they wanted to buy and the booking
fees follow by the down payments. This financing plan allow Mah Sing Group BHD to help and gain
customers who are having financial problems during the period of launching the new projects.
Recently, Mah Sing Group BHD has partnership with Philip Lighting to develop smart lighting
system. This strategic alliance surely improves the lighting system and lighting requirements for Mah
Sing Group Berhad’s specific projects. The smart-lighting technology invented by Philips Lighting to
installed at Mah Sing Group BHD property is one of the best advertise to attract more home buyers. In
additional, Philips Hue able to help manage activities including, movies and music sync and alarm
system as well. (PROPERTY,2017).
Mah Sing Group BHD always care about their reputation in the property market so they had
organized a Mah Sing Foundation Charity Dinner. During the charity dinner, Mah Sing Group BHD
had donated RM1.79 million to contribute to the society. Through this donation, it able to increase Mah
Sing Group BHDreputation in the marketand provide more confident to their customersand purchasers.
23. 23
7.0 Major capital investments and major sources offunding
Based on CONSTRUCTION (2017), Mah Sing Group BHD had announced that they will pay
RM60mil for a 3.6 acres land in Titiwangsa, Kuala Lumpur. According to Update (2017), the major
sourcescausedMah Sing Group BHDto invest in this land is because the land located just 3.7KM away
from Kuala Lumpur City Centre and the KLCC which is the most interesting attraction. There is no
need worry of transportation problems because there are existing Titiwangsa LRT, monorail and MRT
interchange. In the future, there will be implement of Hospital KL MRT Station which just 250m away
from the land.
According to Kiasutrader (2014), Mah Sing Group BHD had invested RM656.9 million on 88.7
acres leasehold industrial land in the CBD of Puchong. The location of the land located behind IOI mall
and enjoy strong connectivity via 5 LRT stations and highways such as LDP,KESAS,FederalHighway
and etc. This project enables Mahsing’s total GDV increase by 23% to RM50.3 million. Lastly, it is the
earmarked for an integrated mixed development worth GDV RM9.3 billion featuring with service
apartment, mall, SOVO, offices, hotel, shoptlots and etc.
8.0 Trends ofthe company
8.1 Liquidity
The liquidity of Mah Sing Group Berhad is shown by looking at the current ratio. The higher
the current ratio, the higher the liquidity of the group. For year 2013 and 2014, Mah Sing Group Berhad
has a current ratio of 2.54, which means that for every RM1 debt, Mah Sing Group Berhad has the
ability to pay RM2.54. In year 2015, the current ratio has increased to 3.43. In the following year, the
current ratio has dropped slightly to 3.10. In conclusion, in year 2015 and 2016, the company has a
higher liquidity compared to 2013 and 2014.
24. 24
8.2 Activity
The financial activity of Mah Sing Group can be shown in Inventory Turnover, Average
Collection Period and also Average Payment Period. The Inventory Turnover shows the number of
times inventory of the company is sold or used in a time period. Mah Sing reported an inventory
turnover of 18.33, 13.71, 12.16 and 6.15 from 2013 to 2016. This mean that Mah Sing group is getting
weaker year by year in selling off their inventory. However, this can be explain due to the significant
increase of inventory at the year of 2016 compared to previous three year. Besides that, Mah Sing also
reported with a 216.81, 213.34, 207.55 and 180.53 on their Average Collection Period from 2013 to
2016. This indicate that Mah Sing getting faster in collecting back their payment. In addition, Mah Sing
reported a 76.88, 96.11, 83.17 and 100.42 on their Average Payment Period from 2013 – 2016. This
mean Mah Sing is getting slower in making payment to their creditor. It may result in risk for their
liquidity position.
8.3 Debt
The debt of Mah Sing Group can be shown by refer to the debt ratio of the company. Mah Sing
Group reported an average debt ratio of 0.57 or 57% during the end of December 31 2013. This mean
that the company’s debt during this year is 57% to its total assets. In the year of 2014 the company’s
total debt and total assets grow significantly to RM 3,027,675,000 and RM 5,305,986,000 respectively.
However, the debt ratio of 2014 remain 57% which mean the company financed greater through their
debt than assets. For the end of year during 2015, the company’s debt ratio reduced to 0.44 or 44% due
to the slightly decrease in their total debt and the increase in their total assets. This mean that the
company financed more than a half through their assets during 2015. In the year 2016, the company
seems to performance much better on their debt compared to previous three years. The company
reported only a 0.38 or 38% of debt ratio during 2016. By refer to the line chart of the debt ratio, we
can clearly see that Mah Sing Group had performed better during 2016.
25. 25
8.4 Profitability
To evaluate the trend of profitability, the net profit margin is used to determine the profitability.
Net profit margin can be defined as a percentage of profit extract from its total sales, which means a
higher net profit margin results in higher profitability. In year 2013, Mah Sing Group Berhad has the
highest profitability of 18.62% among 2013-2016. However,in the following year, the profitability has
dropped to the lowest among the four years, which is only 15.66%. In 2015, the net profit margin has
increased to 16.2%. Last but not least, in year 2016, the profitability has further increased, which has a
net profit margin of 16.33%.
8.5 Market Performance
The Mah Sing Group’s market price shown to be continuously falling from the end of year of
2013 to 2016 which is 1.65, 1.65, 1.45 and 1.43 respectively. However,the Price/Earnings Ratio shown
to be increase from 2013 to 2016 which is 7.50, 7.17, 9.06 and 11. This could mean that the investors
expect to see significant growth in earnings in the future. In addition, the Price/Book Ratio of Mah Sing
Group from 2013 to 2016 reported to be 1.09, 1.05, 0.92 and 0.90 respectively. Traditionally, value that
under 1.0 is considered a good P/B value because this indicating a potentially undervalued stock.
Therefore,the marketperformance of Mah Sing Group still seemsto be fine asmany investor have high
expectation on them in making good profit in the future.
26. 26
8.6 Ratios for the company
8.6.1 Current ratio
This ratio is a liquidity ratio that measures a company’s ability to pay short-term and long-term
obligations. It can be calculated by dividing current assets to current liabilities.
Mah Sing’s Current Ratio from 2013 - 2016
v
Year CurrentAssets(RM’000) CurrentLiabilities(RM’000) CurrentRatio
2016 4,640,273 1,496,366 3.10
2015 5,165,004 1,507,651 3.43
2014 4,064,289 1,598,105 2.54
2013 3,745,449 1,476,393 2.54
27. 27
8.6.2 Quick Ratio
Quick Ratio is an indicator of a company’s short-term liquidity and it’s used to measure of how well a
company can meet its short-term financial liabilities. Quick Ratio is also known as the Acid-Test Ratio.
It can be calculated by using the equation as follow:
Quick Ratio =
𝑪𝒂𝒔𝒉+𝑨𝒄𝒄𝒐𝒖𝒏𝒕𝒔 𝑹𝒆𝒄𝒆𝒊 𝒗 𝒂𝒃𝒍𝒆
𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔
Mah Sing’s Quick Ratio from 2013 - 2016
Year Cash(RM’000) AccountsReceivable (RM’000) CurrentLiabilities(RM’000) Quick Ratio
2016 923,769 1,039,732 1,496,366 1.31
2015 1,358,665 1,062,433 1,507,651 1.61
2014 639,176 818,338 1,598,105 0.91
2013 822,290 581,748 1,476,393 0.95
28. 28
8.6.3 Inventory turnover
This ratio is a measure of the number of times inventory is sold or used in a time period such as a year.
Inventory Turnover can be obtained by dividing the cost of goods sold to inventory.
Mah Sing’s Inventory Turnover from 2013 - 2016
Year Cost of goodssold(RM’000) Inventory(RM’000) Inventoryturnover
2016 2,212,152 359,989 6.15
2015 2,314,138 190,362 12.16
2014 2,122,164 154,754 13.71
2013 1,396,936 76,225 18.33
29. 29
8.6.4 Average collection period
The Average Collection Period also referred to as the “ratio of days to sales outstanding”. It is the
average number of days it takes a company to collect its accounts receivable. The Average Collection
Period can be calculated as follow:
Average Collection Period:
𝐴𝑐𝑐𝑜𝑢𝑛𝑡 𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒
𝐴𝑛𝑛𝑢𝑎𝑙 𝐶𝑟𝑒𝑑𝑖𝑡 𝑆𝑎𝑙𝑒𝑠/365
Annual Credit Sales = Account Receivable previous year – Cash Receivedcurrent year + Account Receivable current year
Mah Sing’s Average Collection Period from 2013 – 2016
Year AccountsReceivable(RM’000) Annual CreditSales(RM’000) Average Collection Period
2016 1,039,732 2,102,165 180.53
2015 1,062,433 1,868,378 207.55
2014 818,338 1,400,083 213.34
2013 581,748 979,372 216.81
Year AccountsReceivable(RM’000) Cash Received(RM’000) Annual CreditSales(RM’000)
2016 1,039,732 0 2,102,165
2015 1,062,433 12,393 1,868,378
2014 818,338 3 1,400,083
2013 581,748 407 979,372
2012 398,031
30. 30
8.6.5 Average payment period
Average payment period means the average period taken by the company in making payments to its
creditors. It can be calculated by dividing account payable to daily cost of goods sold.
Mah Sing’s Average Payment Period from 2013 - 2016
Year Accountpayable (RM’000) Dailycost of goodssold(RM’000) Average paymentperiod
2016 608,591 6060.69 100.42
2015 527,313 6340.10 83.17
2014 558,811 5814.15 96.11
2013 294,224 3827.22 76.88
31. 31
8.6.6 Total Assets Turnover
Total Assets Turnover ratio shows how efficiency a company can use its assets to generate sales by
comparing the net saleswith the average total sales.The equation for TotalAssetsTurnover is asfollow:
Total Assets Turnover =
𝑺𝒂𝒍𝒆𝒔
𝑻𝒐𝒕𝒂𝒍 𝑨𝒔𝒔𝒆𝒕𝒔
Mah Sing’s Total Assets Turnover from 2013 - 2016
Year Sales(RM’000) Total Assets(RM’000) Total AssetsTurnover
2016 2,957,617 6,220,155 0.48
2015 3,108,506 6,615,678 0.47
2014 2,904,723 5,305,986 0.55
2013 2,005,596 4,583,751 0.44
32. 32
8.6.7 Debt ratio
Debt ratio is a ratio that indicates the proportion of a company's debt to its total assets. It is a
financial ratio that measures the extent of a company's leverage. It can be calculated by dividing total
debt to total assets.
Mah Sing’s Debt Ratio from 2013 - 2016
Year Total debt(RM’000) Total assets(RM’000) Debt ratio
2016 2,384,028 6,220,155 0.38
2015 2,931,583 6,615,678 0.44
2014 3,027,675 5,305,986 0.57
2013 2,620,472 4,583,751 0.57
33. 33
8.6.8 Time Interest Earned
The Time InterestEarnedratio also known asinterest coverage ratio is a measure of a company’s ability
to pay its debt obligations. The Time Interest Earned can be calculated as operating profit divided by
the interest expenses.
Time Interest Earned =
𝑶𝒑𝒆𝒓𝒂𝒕𝒊𝒏𝒈 𝑷𝒓𝒐𝒇𝒊𝒕
𝑰𝒏𝒕𝒆𝒓𝒆𝒔𝒕 𝑬𝒙𝒑𝒆𝒏𝒔𝒆𝒔
Mah Sing’s Time Interest Earned from 2013 – 2016
Year OperatingProfit(RM’000) InterestExpenses(RM’000) Time InterestEarned
2016 477,576 4,333 110
2015 499,963 6,324 79
2014 453,449 4,664 97
2013 368,748 3,257 113
34. 34
8.6.9 Fixed payment coverage ratio
Fixed payment coverage ratio is a ratio to measure the company's ability to meet its fixed-
charge obligations. The formula to calculate the ratio is as below:
Year Earningsbefore interest&taxes(RM’000) Lease payments(RM’000)
2016 487,272 6,841
2015 510,017 7,000
2014 459,676 6,937
2013 374,761 7,173
Year Interest(RM’000) Principal payments(RM’000)
2016 4,333 4,210
2015 6,324 6,013
2014 4,664 7,863
2013 3,257 5,405
Year Preferredstockdividends(RM’000) Fixedpaymentcoverage ratio
2016 0 29.56
2015 0 24.23
2014 0 21.13
2013 0 21.66
35. 35
Mah Sing’s Fixed payment coverage ratio from 2013 – 2016
8.6.10 Gross Profit Margin
Gross Profit Margin is a financial calculation that show a company’s financial health. It indicates the
percentage of funds remaining after removing the cost of goods sold from the revenue figures.
Gross Profit Margin =
𝑮𝒓𝒐𝒔𝒔 𝑷𝒓𝒐𝒇𝒊𝒕
𝑺𝒂𝒍𝒆𝒔
𝒙 𝟏𝟎𝟎
Year Gross Profit(RM’000) Sales(RM’000) Gross ProfitMargin
2016 745,465 2,957,617 25.20%
2015 794,368 3,108,506 25.55%
2014 782,559 2,904,723 26.94%
2013 608,660 2,005,596 30.35%
36. 36
Mah Sing’s Gross Profit Margin from 2013 – 2016
8.6.11 Operating profit margin
Operating margin is a ratio used to measure a company’s pricing strategy and operating
efficiency. The ratio can be calculated by dividing operating profit to sales.
Mah Sing’s Operating Profit Margin from 2013 – 2016
Year Operatingprofit(RM’000) Sales(RM’000) Operatingprofitmargin
2016 477,576 2,957,617 16.15%
2015 499,963 3,108,506 16.08%
2014 453,449 2,904,723 15.61%
2013 368,748 2,005,596 18.39%
37. 37
8.6.12 Net Profit Margin
Net Profit Margin show a company’s percentage of revenue left after all expenses have been deducted
from the sales. It shows the amount of profit that the company can earn from its total sales. The Net
Profit Margin can be calculated by:
Net Profit Margin =
𝑵𝒆𝒕 𝑷𝒓𝒐𝒇𝒊𝒕(𝑩𝒆𝒇𝒐𝒓𝒆 𝒕𝒂𝒙)
𝑺𝒂𝒍𝒆𝒔
𝒙 𝟏𝟎𝟎
Mah Sing’s Net Profit Margin from 2013 – 2016
Year NetProfit(RM’000) Sales(RM’000) NetProfitMargin
2016 482,939 2,957,617 16.33%
2015 503,693 3,108,506 16.20%
2014 455,012 2,904,723 15.66%
2013 371,504 2,005,596 18.52%
38. 38
8.6.13 Return on total assets
Return on total assets is a ratio that indicates the effectiveness of a company in using its assets to
generate earnings. It can be calculated by dividing the earnings before interest and taxes to the total
assets.
Mah Sing’s Return on total assets from 2013 – 2016
Year Earningsfor commonstockholders(RM’000) Total Assets(RM’000) Returnon total assets
2016 361,357 6,220,155 5.81%
2015 386,677 6,615,678 5.84%
2014 339,249 5,305,986 6.39%
2013 280,616 4,583,751 6.12%
39. 39
8.6.14 Return on Common Equity
The Return on Common Equity or ROE is a profitability ratio that measures the ability of a firm to
generate profits from its shareholders investments in the company. The equation used to calculate
Return on Common Equity is as follow:
Return on Common Equity =
𝑵𝒆𝒕 𝑰𝒏𝒄𝒐𝒎𝒆
𝑻𝒐𝒕𝒂𝒍 𝑪𝒐𝒎𝒎𝒐𝒏 𝑬𝒒𝒖𝒊𝒕𝒚
Mah Sing’s Return on Common Equity from 2013 – 2016
Year NetIncome (RM’000) Total CommonEquity(RM’000) Return onCommonEquity
2016 361,357 3,836,127 9.35%
2015 386,677 3,684,095 10.49%
2014 339,249 2,278,311 14.89%
2013 280,616 1,963,279 14.29%
40. 40
8.6.15 Earnings per share
Earnings per share is the portion of a company’s profit allocated to each outstanding share of common
stock. It servesasan indicator of a company’s profitability. It can be calculated by dividing the earnings
to the number per share.
Mah Sing’s Earnings per share from 2013 – 2016
Year Earningsper share (RM)
2016 0.13
2015 0.16
2014 0.23
2013 0.22
41. 41
8.6.16 Price/Earnings (P/E)
Price Earnings Ratio is the ratio of company’s current share price to its earnings per share. It shows
how much the market is willing to pay for a company’s earnings.
Price/Earnings (P/E) =
𝑴𝒂𝒓𝒌𝒆𝒕 𝑷𝒓𝒊𝒄𝒆 𝑷𝒆𝒓 𝑺𝒉𝒂𝒓𝒆
𝑬𝒂𝒓𝒏𝒊𝒏𝒈 𝑷𝒆𝒓 𝑺𝒉𝒂𝒓𝒆
Mah Sing’s Price/Earnings Ratio from 2013 – 2016
Year Market Price PerShare EarningsPer Share Price/Earnings(P/E)
2016 1.43 0.13 11.00
2015 1.45 0.16 9.06
2014 1.65 0.23 7.17
2013 1.65 0.22 7.50
42. 42
8.6.17 Price/book ratio
The price to book ratio is a ratio used to compare a stock’s market value to its book value. It can be
calculated by dividing market price to book value.
Mah Sing’s Price/Book Ratio from 2013 – 2016
Year Market Price (RM’000) Bookvalue (RM’000) Price/bookratio
2016 1.43 1.59 0.90
2015 1.45 1.57 0.92
2014 1.65 1.57 1.05
2013 1.65 1.51 1.09
43. 43
9.0 Conclusion
In the nutshell, Mah Sing Group Sdn. Bhd. has managed to achieve tons of awards, which is a very
optimistic sign. They are considered as a very successfulcorporate as not much corporate can obtain
so much achievement in a year.
The key to their success is most likely that they care for the people. Not only the customers, but also
their employees. Man Sing Group tried their best to contribute back to the society, in terms of
educational support, financial support, supports for the underprivileged. All of these acts help Man
Sing to build up a strong good will and creates lots of trust in people. On the other hand, they also
established the Mah Sing Academy to improve their employees ability and talents. This is a very wise
action, as this has a direct effect on the company performance.
On the the other side, every company was not perfect, the weaknesses of Mah Sing Group can also
affect their performance, as mentioned above, the group can build the affordable houses located at
outskirts, as the price of the it is cheaper. Other than that, the Group should pay more attention and
consideration to the contractors and works executed on the construction site, and not only on the cash
flows, and marketing segments. This can greatly improve and avoid the freeze of approvals of new
properties.
44. 44
10.0 Appendices
Formula to calculate ratios:
a. Current ratio = total assets / total liabilities
b. Quick ratio = (Cash + Account receivables) / Current Liabilities
c. Inventory turnover = Cost of goods sold / Inventories
d. Average collection period = Account receivable / Daily Credit Sales
e. Average payment period = Account payable / Daily cost of goods sold
f. Total Assets Turnover = Sales / Total Assets
g. Debt ratio = Total debt / Total Assets
h. Time Interest Earned = Operating profit / Interest Expenses
i.
j. Gross profit margin = (Gross profit / Sales) x 100%
k. Operating profit margin = (Operating profit / Sales) x 100%
l. Net profit margin = (Net profit before tax / Sales) x 100%
m. Return on total assets = Earnings for common stockholders / Total Assets
n. Return on common equity = Net income / Total common equity
45. 45
o. Earnings per share = Earnings / number per share
p. Price / earnings = Market price / Earning per share
q. Price / book ratio = Market price / Book value
46. 46
Sources ofdata
2013 – 2014
Figure 1: Sales & Cost of goods sold
Figure 2: Account payables
Figure 3: Total Assets & Inventories etc.
47. 47
Figure 4: Total current liabilities & total liabilities
Figure 5: Operating profit, Earnings before tax and interest & Gross Profit
57. 57
Figure 24: Net profit (before tax)
Figure 25: Net Income (used for calculating return on common equity)
Figure 26: Total common equity
Figure 27: Cash Receivable
58. 58
11.0 References
1. Mah Sing Group, (2017). Mah Sing Group 2017 Annual Report.
2. Tee,S., (2017). Malaysia’s property market in 2017: are we in the driver seat? Retrieved
from: http://www.swhengtee.com.my/Swhengtee-News/Malaysias-property-market-in-2017-
Are-We-In-The-Driver-Seat.html(Accessed on 3rd November 2017)
3. Shen, O. C. (2016). Mah Sing prepares to face headwinds. Retrieved 5th
December 2017 from
http://www.focusmalaysia.my/Mainstream/mah-sing-prepares--to-face-headwinds
4. News,C. (2016). Property developer Mah Sing remains top pick for Macquarie. The Star
Online. Retrieved 5th
December 2017 from https://www.thestar.com.my/business/business-
news/2016/05/27/property-developer-mah-sing-remains-top-pick-for-macquarie/
5. NST, B. (2017). Negligible impact on Mah Sing from Cabinet’s decision to freeze luxury
properties approvals: CIMB. New Straits Times. Retrieved 5th
December 2017 from
https://www.nst.com.my/business/2017/11/305273/negligible-impact-mah-sing-cabinets-
decision-freeze-luxury-properties
6. The Star Malaysia (2017). Mah Sing giving away 1, 1612 Touch’ n Go cards. Pressreader.
Retrieved 5th
December from https://www.pressreader.com/malaysia/the-star-
malaysia/20161218/281724089196295
7. PROPERTY (2017). Mah Sing launches ‘Reinvent Affordability’ campaign. The Star Online.
Retrieved 5th
December 2017 from https://www.thestar.com.my/business/business-
news/2017/10/26/mah-sing-launches-reinvent-affordability-campaign/
8. PROPERTY (2017). Mah Sing forms strategic alliance with Philip lighting. The Star Online.
Retrieved 5th
December 2017 from https://www.thestar.com.my/business/business-
news/2017/11/16/mah-sing-forms-strategic-alliance-with-philips-lighting/
9. News,P. (2017). Mah Sing launches B.I.G. Programme. Retrieved 5th
December from
http://www.starproperty.my/index.php/articles/property-news/mah-sing-launches-big-
programme/
10. News,M. (2016). Easing financial burden of property buyers. The Star Online. Retrieved 5th
December from https://www.thestar.com.my/metro/community/2016/12/07/easing-financial-
burden-of-property-buyers-developers-financing-plan-allows-booking-of-unit-and-stag/
59. 59
11. PROPERTY (2017). Mah Sing forms strategic alliance with Philips Lighting. The Star
Online. Retrieved 5th
December from https://www.thestar.com.my/business/business-
news/2017/11/16/mah-sing-forms-strategic-alliance-with-philips-lighting/
12. CONSTRUCTION (2017). Mah Sing’s Titiwangsa land purchase seen positive. The Star
Online. Retrieved 5th
December 2017 from https://www.thestar.com.my/business/business-
news/2017/05/19/mah-sings-titiwangsa-land-purchase-seen-positive/
13. Update, C. (2017). Mah Sing Group Berhad Acquiring Titiwangsa Land for Rm60m. MIDF
RESEARCH. Retrieved 5th
December 2017 from
http://www.midf.com.my/images/Downloads/Research/Equity/MahSing/MAHSING-
Acquiring-Titiwangsa-Land-for-RM60m-MIDF-180517.pdf
14. Kiasutrader (2014). Mah Sing Group Berhad- New Landbank in Puchong. Investor.com.
Retrieved 5th
December 2017 from
https://klse.i3investor.com/blogs/kenangaresearch/58993.jsp
