PROPERTY developer Jiankun International Bhd is upbeat on its outlook for the real estate sector as it believes that the worst is over.
The group expects to ride on the stronger demand ahead, driven by a better economic outlook and the record-low interest rate environment.
It aims to increase its landbank to around 50 acres by end-2021 in anticipation of the economic recovery supported by the National COVID-19 Immunisation Programme and the positive factors driving housing demand
Jiankun’s ongoing project – Amani Residences – which is located in the heart of Bandar Puteri Puchong is currently 95% completed.
The group expects the unit hand-over to the buyers to take place by 4Q 2021. With a sales rate of 95%, it will contribute positively to the group’s financial performance in FY2021.
The escalation of the physical construction progress of Amani Residences from 65% to 95% over the last six months was mainly driven by the appointment of the new executive director/CEO Edwin Silvester Das in December 2020.
This was despite the strict standard operating procedure (SOP) that the group adopted amid the resurgence of COVID-19 cases and the re-introduction of a more stringent movement control order (MCO) in the country.
Das’ vast experience in the banking sector – both in Malaysia and abroad – and his ability to turnaround companies has put him in a good position to push forward the group’s agenda to expand its landbank and complete the ongoing project.
“As the pandemic delivered severe impact on the property sector, this puts us in a good position to leverage and negotiate to acquire lands at attractive prices,” commented Das. “Coupled with the Government’s measures such as home ownership campaign and current low-interest rates, we strongly believe demand will be stimulated again.”
In December 2020, the group proposed to acquire a leasehold land in the Melaka Tengah District to build serviced apartments and a 28-storey hotel. This forms part of the group’s strategy to expand its property development outside of the crowded and competitive Klang Valley landscape.
Additionally, the group has in 1Q 2021 announced its diversification into land reclamation business following the acquisition of Embon Global Venture Sdn Bhd.
This acquisition provides Jiankun with immediate access to reclamation concession rights for an area spanning 30 acres in Melaka. The duration of the concession is within 12 months from the date of the joint venture agreement signing between Embon Global and the Melaka State Government.
“In order to create a recurring income stream to the group, we have also acquired Limpah Restu Development Sdn Bhd for RM10 mil in March,” Das pointed out.
“This acquisition comes with the alienation of 16-acre leasehold land in Perak for the business of private cemetery, crematorium and columbarium.”
For its FY2020, Jiankun managed to maintain three consecutive years of growth since its turnaround in FY2018.
Its net profit in FY2020 increased by 29.3% to RM5.6 mil from RM4.3 mil in FY2019. The improvement was mainly due to the higher profit recognition from its existing project – Amani Residences.
At 2.36pm, Jiankun was unchanged at 29.5 sen with 1.22 million shares traded, thus valuing the company at RM61 mil. – June 30, 2021