MCT debuts on 4% premium

KUALA LUMPUR: MCT Bhd, which debuted on the Main Market of Bursa Malaysia yesterday following a reverse takeover exercise (RTO) of GW Plastics Holdings Bhd, saw its share price close 5 sen or 4% higher at RM1.33 yesterday above its reference price of RM1.28.
MCT saw some 13.25 million shares changing hands at the end of its first trading day. It had opened at RM1.43 yesterday morning, at a 15 sen premium with 253,300 shares traded.
Its CEO Datuk Seri Tong Seech Wi is confident that the integrated property developer will be able to maintain its four-year average gross profit margin of 44.3% moving forward despite the soft property market.
"We're fully aware of the current soft property market so we've lined up RM3.9 billion worth of properties priced RM700,000 and below. Of this, 56% are priced below RM500,000," he told a press conference after the group's listing ceremony here yesterday.
"This is what the market needs. We believe with this right product and pricing, we should be able to ride through this difficult period."
Although it is launching a lot of affordable housing, Tong said MCT employs the modular construction technique, which through simplification and standardisation, allows material wastage to be minimised and faster and cheaper job completion. He added that this technology is particularly useful when it comes to mass housing, where designs are basic and simplified.
On the implementation of the Goods and Services Tax (GST), Tong believes MCT will not incur the kind of costs typical developers will incur. This is because it is an integrated developer with an in-house construction arm and trading company.
"Taking all these into account, we believe the impact to us could possibly be only half of typical developers. Assuming that the impact for MCT is only half of typical developers, then we stand to have an advantage compared with others. If we only incur 1.3% (half of the 2.6% extra cost), we've 1.3% advantage in terms of costing," said Tong.
Based on the Real Estate and Housing Developers' Association Malaysia's estimates, a RM500,000 house will now cost about 2.6% more with GST.
Tong said the company still sees strong demand for affordable housing because of the high urbanisation rate in the Klang Valley.
The Klang Valley-focused property company has ongoing projects with a gross development value (GDV) of RM2.26 billion and future projects with GDV of RM6.72 billion. It has 296 acres of undeveloped landbank.
MCT's anchor investors include Philippines' largest property developer Ayala Land and Lembaga Tabung Haji.