Paramount sets higher target after bumper year
PETALING JAYA: Paramount Corp Bhd remains bullish about the market outlook and plans to surpass its previous sales target of RM1.4bil for financial year 2024 (FY24), supported by its seven new launches with an estimated gross development value (GDV) of RM2.4bil.

TA Securities Research said the seven new launches include new phases of its current projects, as well as other projects in its pipeline.

The research house also anticipates Paramount’s luxury high-rise residential development located in Taman U-Thant, The Ashwood, to be well received.

This is based on the adjacent project’s sell-out success in 2021, as well as its attractive selling price of RM1,100 to RM1,200 per sq ft compared with neighbouring properties priced at RM1,400 per sq ft.

TA Research noted that The Ashwood alone, which has a GDV of RM758mil, accounts for 32% of Paramount’s total FY24 releases.

Additionally, the research house noted that Paramount’s co-working division is on an expansion drive as the group said it aims to expand its co-working space beyond the Klang Valley and double its total space under management to 300,000 sq ft across the country.

TA Research said the expansion is based on the evolving demand for office space after the Covid pandemic, which was made evident by the positive occupancy rates for its two new locations, as well as the division achieving profitability in FY23.

The two new co-working spaces, Co-labs Coworking Ken TTDI and Co-labs Coworking The Five, reported occupancy ratee of 50% and 40%, respectively.

TA Research noted that Paramount’s co-working division posted a pre-tax profit of RM1.96mil, which in this case is a significant improvement compared with FY22, when the group had posted a loss after tax of RM579,000.

According to the research house, the change was primarily driven by higher profits for all of its Co-labs coworking spaces.

As of Dec 31, 2023, the average occupancy rate for its co-working spaces stood at 66%, a 4% drop from the previous year’s rate of 70%, which was believed to be largely due to its 37,000 sq ft expansion in the fourth quarter of 2023.

On a separate note, Paramount said negotiations for its eighth location in the Klang Valley, situated within a transit-oriented development, are in its final stages.

Paramount recorded revenue of RM1.01bil for FY23 ended Dec 31, 2023, a 19.44% hike year-on-year compared with RM847.46mil in FY22.

TA Research stated that revenue crossed RM1bil for Paramount for the first time, making it as a milestone year for the company.

“This underlines a positive trajectory for Paramount, indicating that the challenges faced since the Covid pandemic are behind the group,” it added.

However, compared with the RM1.2bil target for FY23, the company’s sales saw a minor year-on-year decline of 1% to RM1.12bil.

The decline was attributed mostly to the postponement of its two projects, Savana @ Utropolis in Batu Kawan, Penang, and The Ashwood, due to difficulties in obtaining approvals.

TA Research also noted that Paramount’s FY23 sales could have increased to RM1.4bil if the projects had gone according to plan.

TA Research adjusted its earnings forecast for FY24 and FY25 by an increase of 1.4% and a 2.1% decrease, respectively.

The research house also introduced FY26 net profit estimates on Paramount of RM101.5mil.

TA Research maintained a “buy” call on Paramount with a new target price of RM1.47 per share based on a higher price-to-book ratio multiple of 0.6 times.
Corporate News,ParamountCorp,PropertyDevelopment,FY24,SalesTarget,TheAshwood,CoworkingSpace,Expansion,Profitability,RevenueGrowth,TargetPrice
Paramount Corp Bhd remains bullish about the market outlook and plans to surpass its previous sales target of RM1.4bil for financial year 2024 (FY24), supported by its seven new launches with an estimated gross development value (GDV) of RM2.4bil.