Paramount on track to achieve RM1.2bil sales target this year

PETALING JAYA: Paramount Corp Bhd’s earnings growth in financial year 2023 (FY23) to FY25 will be backed by record unbilled sales of RM1.5bil, strong property revenue and proactive land bank replenishment.

According to TA Research, for the second half of 2023 (2H23), the group will launch new properties worth RM714mil to drive its sales target of RM1.2bil.

“While management is cautious about the sector outlook as the brisk sales observed in the market could be partially attributed to temporary demand-supply imbalances, management remains hopeful for sustained growth through a stronger domestic economy and investment friendly policies.

“In the meantime, the group is looking to increase the capacity of its co-working division by 45% by year-end, leveraging on the rising demand for flexible working space post-Covid,” it said in a report.

TA Research anticipated FY23 to be another milestone year for Paramount as the group’s revenue is projected to surpass RM1bil for the first time.

Paramount reported a significant increase in new property sales in the second quarter of 2023, with a 20% year-on-year (y-o-y) and 11% quarter-on-quarter growth, totalling RM325mil.

This boosted 1H23 sales to RM617mil, representing a remarkable 45% y-o-y increase.

The sales performance can be attributed to the substantial rise in property launches in 1H23, totalling RM820mil compared with RM54mil in the same period in 1H22.

Currently, Paramount has achieved a healthy 73% take-up rate for its ongoing projects.

“We anticipate Paramount will meet its sales target of RM1.2bil, thanks to the positive response to its recent property launches.

“Notably, the sales figures achieved in 1H23 already account for 51% of the target.”

The research firm said the group is also on the lookout for new land and will focus on replenishing its land bank near its existing township, capitalising on the success of the township, rather than exploring new locations.

“Given its familiarity with the locations, this approach will enable the group to achieve a quick turnaround. Besides, there is also a plan to expand the industrial property segment further,” it added.

TA Research maintained its “buy’’ call on the stock with an unchanged target price of RM1.17 per share.