KUCHING: Sarawak-based company Naim Holdings Bhd has plans of growing the company for the next five years with focus on four main key areas – property development, construction, property investments and oil and gas.
For the years to come, Naim will be banking in on Sarawak’s ability as being a tourist attraction as well as a booming economic region to help sustained its property demand there, said TA Securities Holdings Bhd (TA Research) in a recent report.
The research firm further pointed out that the company also eyed the mass housing market as well as niche market segments such as lifestyle housing, retirement destination and the Malaysia My Second Home (MM2H) programme.
Moving forward to the next five years, Naim aimed to capture around 20 per cent of the whole Sarawak property market. Naim had also penetrated the Sabahan housing market by setting up a skeletal office to survey the property market there.
“If all goes well, Naim expects a very modest sale of RM20 million to accrue by 2013 from Kota Kinabalu and Kimanis. The company is allocating around RM75 million to acquire some 300 acres of land in Sabah this financial year,” said the research firm.
On the financial front, profit before tax (PBT) margin was expected to be healthy, in the region of between 25 per cent and 30 per cent. Currently, Naim’s property segment contributed around 30 per cent to 40 per cent while construction segment contributed well above 50 per cent of its topline.
TA Research predicted Naim’s property arm to contribute around 40 per cent of total revenue which it believed was a healthy revenue mix.
On the other hand, Naim was confident of sustaining and growing its construction arm. The company was looking at a total orderbook replenishment of RM2.5 billion for the next five years, comprising open tender projects, direct negotiation projects and private finance initiative projects.
Apart from strengthening its property developments, the company was aiming to set up a Real Estate Investment Trust (REIT) via its investment properties. This was, however, a longer term outlook spanning over five years from now.
“The aim is to set up a REIT consisting of over RM1 billion worth of retail and commercial investments. Among the projects in the pipeline are the specialist medical center and the shopping mall located in Bandar Baru Permyjaya, Miri,”said the research house.
The RM50 million mall, dubbed the Permy Mall is currently under construction with an expected net lettable area of around 160,000 square feet (sq ft). Rental rates are approximately RM8 to RM10 per sq ft. Naim was looking at a yield of around eight per cent.
As of January 2011, Naim’s 36 per cent associate stake in Dayang Enterprise Holdings Bhd (Dayang) was worth RM374 million. The research firm believed that with the strong news flow of awarded contracts, Dayang’s bottomline would be even more astounding from its current 15 per cent to 20 pr cent of bottomline contribution.
Naim currently has a balance land bank of over 2,600 acres with a potential gross development value of RM5.9 billion. The company targeted to capture between 40 per cent and 60 per cent of Sarawak’s future housing market estimated at 14,000 units per annum from its current share of 7.5 per cent.
“To illustrate the property price appreciation in Sarawak, we take Naim’s Prima Villa as an example. Back in 1999 when the development was launched, the land price was about RM19 per square feet. Now, the land value is around RM30 per square feet,” TA Research pointed out.
“Average landed properties in Miri for example, cost around RM100,000 just five years ago. Now, the value has increased to around RM 150,000. We believe that Naim would continue to add value in its township going forward,” it added.
The research house forecasted Naim’s property segment to post revenues of RM155.6 million for FY10, RM215.6 million for FY11 and RM254.7 million for FY12. It believed that property segment revenue contributions would breach over 40 per cent of total revenue.