MAIN Market-listed tourism-related property developer Yong Tai Bhd has sealed a conditional share sale agreement (SSA) to acquire the entire equity stake in Lahad Datu (Sabah)-based Sumberjaya Builders Sdn Bhd for RM15 mil cash.
This strategic acquisition marks Yong Tai’s foray into Sabah’s property market with a steady growth outlook, thus further diversifying the group’s earnings stream and enhancing future profitability.
Through this acquisition, Yong Tai will undertake two promising joint-venture (JV) projects already secured by Sumberjaya in Sabah:
- Lahad Datu project: Spanning 11.97 acres, this project features a mixed development of shop lots, terrace houses and walk-up flats.
It carries an estimated gross development value (GDV) of RM70.12 mil and is expected to generate a development profit of RM10.80 mil. Construction is anticipated to commence in 3Q 2025 with completion slated for 3Q 2028.
- Tawau project: Situated on 15.25 acres, this development which boasts a GDV of RM106.58 mil includes both commercial and residential units. Projected to deliver a development profit of RM29.78 mil, the Tawau project is scheduled to begin in 4Q 2025 with completion targeted by 4Q 2030.
Yong Tai’s strategic acquisition reflects careful consideration of market potential, profitability and minimal upfront capital requirements.
Importantly, the landowners for both projects will receive their entitlement via completed property units which significantly eases immediate cash flow burdens for the group.
“This is in contrast to the substantial upfront investments previously committed to our projects like Encore Melaka and Courtyard by Marriott Melaka,” commented Yong Tai’s CEO and executive director Datuk Wira Boo Kuang Loon.
“Unlike high-rise developments that require extensive capital and extended timelines, these new projects in Sabah allow Yong Tai to realise profits swiftly and sustainably, hence strengthening our financial position and enhancing returns to our stakeholders.”
All-in-all, the Sumberjaya Builders’ acquisition complements Yong Tai’s on-going development portfolio, including the Impression U-Thant in Kuala Lumpur which is nearing completion in 3Q 2025 and the JV Dawn @ Impression City Melaka which is scheduled for completion by 4Q 2027.
“Our Sabah expansion not only broadens the group’s geographic footprint but also ensures a balanced project pipeline for sustainable long-term growth,” envisages Boo.
“The acquisition price of RM15 mil will be settled in three equal tranches that are structured to maintain financial prudence and cash flow efficiency with payments contingent upon satisfactory due diligence and fulfilment of all conditions precedent.”
At the close of today’s market trading, Yong Tai was down 0.5 sen or 2.94% to 16.5 sen with 549,100 shares traded, thus valuing the company at RM71 mil. – June 26, 2025
