Paramount plans strategic projects to counter market slowdown

KUCHI NG: Pa r amount Corporation Bhd ( Paramount) remains committed to achieving over 10 per cent growth in new sales and earnings from exciting product launches in the pipeline.

RHB Research Institute Sdn Bhd ( RHB Research) noted that FY15 core earnings growth of 27 per cent marks the new CEO Jeffrey Chew’s first report card as he joined the company in July 2014.

For FY16, management expects to achieve RM480 million sales (from RM432 million in FY15) and double- digit earnings growth, on the back of RM770 million worth of new launches.

The research house noted that despite the challenging property market environment, Paramount’s pipeline launches are carefully chosen to ensure more sustainable sales.

New projects include Phase 1 Section 13 Petaling Jaya project andPhase1Batu Kawanuniversity metropolis development.

Both projects were delayed from last year due to the Strata Titles Act amendment, but should be ready for 2H launch.

“While Section 13 mainly targets the young population in the established neighbourhood, the Batu Kawan development is in a new growth area. Another developer, Aspen Group, which is the joint venture partner of the new IKEA store there, fully sold all its retail shops last year.

“As Paramount’s development is located just opposite Aspen Group’s land, it should be similarly sellable,” said the research house.

Acknowledging the market challenges, management has also set a target that at least 30 per cent of annual launches are landed housing. Paramount rolled out its first phase of the Salak Perdana project late last year.

Priced at circa RM450,000 to RM500,0000 per unit, the terraces’ take- up rate has improved to about 40 per cent from 18 per cent in December 2015.

Paramount, having carried out various research and studies, believes that the demand for international school in Klang should be strong, given the lack of reputable private education institutions there. A licence for a new primary and secondary school has already been obtained from the Ministry of Education.

Earthworks for the new campus in Klang will start in Jun 2016, and the construction will take about two years.

“We expect the school to commence operations in 2019. This should add 1,500- student capacity to the current total of 3,141 students in the K12 segment.”