Malaysia’s Property Sector Sets To Remain Bullish, Driven By Buying Interest – MIDF Amanah
KUALA LUMPUR, June 16 (Bernama) -- MIDF Amanah Investment Bank Bhd remains bullish on Malaysia’s property sector this year with buying interest expected to stay healthy.
In a note today, the investment bank said property sales are generally stronger, which should underpin earnings growth going forward.
“Meanwhile, the impact of sales and service tax (SST) on property companies is expected to be minimal as residential buildings are exempted from the 6.0 per cent SST.
“On the other hand, we see a limited impact on earnings from the SST imposed on commercial and industrial buildings. We expect a marginal impact on margin considering the strong demand for industrial assets,” it said.
Citing Bank Negara Malaysia, it said total loan applications increased for three consecutive months on a year-on-year basis, indicating stronger buying demand.
MIDF Amanah also said that for the first quarter of 2025 (1Q FY2025), the earnings of property companies were largely in line with expectations, driven by higher progress billing of ongoing projects
“New property sales are largely in line with expectations. Sales are anticipated to pick up in the second half of 2025 (2H 2025) amid an acceleration of project launches,” it said.
In a nutshell, it noted that most of the developers are targeting higher sales in 2025 as market conditions are favourable with stable demand for property.
The investment bank's top picks are Mah Sing Group Bhd, Matrix Concepts Holdings Bhd and UOA Development Bhd and a target price of RM1.37, RM2.05 and RM1.98, respectively.
MIDF Amanah remained positive on Mah Sing due to stable new sales prospects underpinned by launches of affordable residential projects.
A similar outlook applies to Eco World, backed by growing contributions from its industrial property development segment.
“Besides, the better prospect for recurring income following a data centre build-and-lease deal improves earnings visibility.
“We see better earnings prospects for UOA Development, which will be backed by the profit recognition of its ongoing projects in Klang Valley and income from investment properties,” it said.
Its recent maiden venture into the Johor property market is also expected to support future sales growth.
The dividend yield of UOA Development is attractive at 5.5 per cent, while its balance sheet remains healthy with a net cash position, it added.
-- BERNAMA