KUALA LUMPUR (Dec 21): Mah Sing Group Bhd’s shareholders have given the property developer the greenlight to diversify into rubber glove manufacturing through its subsidiary Mah Sing Healthcare Sdn Bhd.
In a virtual extraordinary general meeting (EGM) today, Mah Sing obtained 99.9962% of votes for the diversification plan to mitigate cyclical earnings from its property development division.
Mah Sing said in the statement the first six production lines of the glove manufacturing factory in Kapar, Klang are on track to be operational as planned in the second quarter of 2021 (2Q21), followed by another six lines, expected to be ready in 3Q21. The company expects a total annual capacity of up to 3.68 billion pieces.
A structural increase in glove usage as a result of new norms, fears of reinfection, higher health awareness and hygiene compliance requirements for healthcare and non-healthcare sectors will continue to see strong demand for gloves even after the Covid-19 pandemic as vaccines become available, said Mah Sing.
Mah Sing noted that it may also explore venturing into related healthcare products, such as personal protective equipment (PPE), pharmaceutical or medical products and services as well as related upstream and downstream activities if demand for such products or services arises.
In conjunction with this, Mah Sing founder and group managing director Tan Sri Leong Hoy Kum reiterated that the group is exploring the possibility of listing the glove manufacturing division within the next five years in Hong Kong to unlock its value in the future.
“The proposed diversification will also complement our existing core property development business, which is focused on the domestic market,” said Leong.
Moving forward, Mah Sing said it will also continue to concentrate on its existing property developments which remain a key focus of the group.
As at Sept 30, 2020, Mah Sing had managed to achieve property sales of approximately RM847.1 million and was on track to achieve its RM1.1 billion sales target this year.
The Phase 2A Carya @ M Aruna project recorded a 90% take-up rate during its launch over the weekend, while the Acacia 2 in Meridin East, Johor project also achieved over 80% take-up at its weekend launch in early December
“We always believe that demand will persist for the right product, in the right location and at the right pricing. Our rapid speed in planning and marketing the new developments are in line with our quick turnaround model and augurs well for our growth strategy,” said Leong.
At the noon break today, shares in Mah Sing settled 1.1% or one sen lower at 90 sen, valuing the stock at RM2.17 billion. Year to date (YTD), the counter had risen 27% from 71 sen.