Matrix Eyes Puchong -Expansion in Klang Valley 新收购计划

After proposing a 1:6 bonus issue with free warrant last week, Matrix delivers good news again to its shareholders by acquiring a piece of prime development land in Puchong.

MCHB announced a proposed acquisition of 5.8-acre land cum approved residential development project in Puchong, next to SetiaWalk, for RM95m  (RM380 psf) from IRDK Ventures Sdn Bhd.

The approved project, comprising 318 units of highrise condominiums and 28 units of four-storey link villas, is currently undergoing preliminary earthworks and piling works. The acquisition is targeted for completion by 3QFY15.


We gather that the current GDV of the project is RM500m, based on approved density of 60 units/acre.

We understand that MCH intends to increase the density to 80-90 units/acre, which could increase total units to 464-522 from 346 currently. Assuming similar ratio of GDV/unit, the potential GDV of the revised development could increase to RM670-754m.

We view the pricing of RM95m (or RM375psf) to be fair as it accounts for 19% of total GDV, in line with the industry rule of thumb of 20%. Furthermore, upon regulatory approvals for higher density/acre, the group’s total costs/GDV would be lower. Turnaround of the project will also be faster given that it already has approvals for development.

Based on the approved project details, we opined that the project would be a high-end development and the estimated construction period would be 4 years.

However, our concern lies on the take-up rate of the development given the high-end nature of the project, coupled with the already bleak property sector outlook.

This acquisition would turn MCH from net cash to net debt with net gearing of 0.1x. Despit e this, the group’s balance sheet remains healthy with room for more acquisitions (if any) before reaches net gearing level of 0.5x.

I think Matrix will reduce the built-up size of condominium units to make it more "affordable" for buyers. Previous development offered large built-up size in order to reduce the density.

The location of the land is quite strategic being close to LDP, Setia Walk, IOI Mall and the upcoming LRT station.

So, despite guarded property sector outlook, Matrix should be able to generate commendable sales from this project I guess.


希望4年后会有很多有钱人还是买高级公寓。