UR OCONTENTS

ANNUAL REPORT 2019

OUR OUR STRATEGY BUSINESS & ACHIEVEMENTS

MANAGEMENT DISCUSSION AND ANALYSIS

04 Corporate Information 22 Management Discussion and pg. 22 05 Our Vision. Our Mission Analysis FINANCIAL 06 Corporate Profile 38 Mah Sing's Value Creation STATEMENTS 07 Luxury Made Affordable Model 08 Corporate Milestones 40 Review of Operations 10 Corporate Structure 11 Group Five-Year Financial Highlights 12 Awards and Recognition pg. 117 14 Snapshots In 2019 18 Mah Sing In The News

COVER RATIONALE

Year 2019 is an important milestone for Mah Sing as we Ultimately, our hope is to reinvent spaces and enhance the celebrated our silver jubilee, marking our 25 th anniversary quality of life of our stakeholders. This a commitment that in the property development industry. Leveraging on over we make to all of them. Throughout these 25 years, we have two decades of experience, we have grown as one of fulfilled our promises and we will continue delivering quality ’s leading property developers. products to create positive impact in the lives of the people residing within the space they call home. In the past one year, Mah Sing has continued to adopt effective marketing strategies, engage creative The cover design is a tribute to our 25th anniversary in the collaborations and aggressive land banking activities to stay property industry and the headline “25 Years Of Excellence” ahead in the industry. Our nimble business model, fast highlights the Group's outstanding achievements over the execution culture, innovative ideas and financial prudence past quarter century. Being bold and majestic, the cover has contributed to our success. design mirrors our dynamism and confidence as we continue our journey of growth into the future. Here’s to Sustainability is embedded within the core of Mah Sing’s another 25 years of reinventing spaces and enhancing lives. vision. We strive to preserve, innovate, and push boundaries towards building a sustainable future. We will continue to prioritise sustainability in our strategic activities and operations to deliver long-term values to the Group and our stakeholders. OUR LEADERSHIP OUR SUSTAINABILITY OUR CORPORATE STATEMENT GOVERNANCE

54 Profile of the Board of Directors 66 Our Sustainability Statement 90 Corporate Governance 62 Profile of Senior Management Overview Statement Team 108 Directors’ Responsibility Statement in Respect of the Preparation of the Annual Audited Financial Statements 109 Additional Compliance Information 110 Statement on Risk Management and Internal Control 113 Audit Committee Report

FINANCIAL STATEMENTS ADDITIONAL NOTICES INFORMATION

118 Directors’ Report 238 Properties Owned By The 246 Notice of Twenty-Eighth Annual 123 Independent Auditors’ Report Group General Meeting 128 Statements of Profit or Loss 243 Statistics of Shareholdings 253 Notice of Dividend Entitlement 129 Statements of Other Comprehensive and Payment Income 253 Statement Accompanying 130 Statements of Financial Position Notice of Annual General 132 Statements of Changes in Equity Meeting 136 Statements of Cash Flows 254 Administrative Guide for the 139 Notes to the Financial Statements Twenty-Eighth Annual General 236 Statement by Directors Meeting 237 Declaration by the Officer Proxy Form Primarily Responsible for the Financial Management of the Company 2 MAH SING GROUP BERHAD Our Business UR OBUSINESS

Mah Sing has become a household name in the property development industry - best known as a market driven property developer that constantly strives to deliver quality homes, realising the people’s dream to own their ideal home.

Leveraging on the Group’s vast experience of over 25 years, Mah Sing has been finding innovative ways to offer products and services of stellar quality and excellence.

In 2019, the Group has acquired three new lands in Valley, which fits the Group’s strategy of landbanking for niche projects in strategic locations which are ready for immediate development.

To date, Mah Sing’s presence spans across Greater , , Penang Island, Johor, and Sabah with 50 projects, cementing the Group’s footprint in the property development industry as one of the leading property developers in Malaysia. Our Business ANNUAL REPORT 2019 3 4 MAH SING GROUP BERHAD Our Business ORPORATE CINFORMATION

BOARD OF DIRECTORS

TAN SRI DATO’ SERI SITI DATUK HO HON SANG ABD MALIK BIN A RAHMAN NORMA BINTI YAAKOB Chief Executive Officer Independent Non-Executive Director Chairperson/Senior Independent Non-Executive Director DATO’ STEVEN NG POH SENG HO KIM POI Executive Director Independent Non-Executive Director TAN SRI DATO’ SRI LEONG HOY KUM DATUK LEONG YUET MEI JANE LEONG JHENG-YI Group Managing Director/ Executive Director Alternate Director to Tan Sri Dato’ Sri Group Chief Executive Leong Hoy Kum

AUDIT COMMITTEE REGISTERED OFFICE STOCK EXCHANGE LISTING

ABD MALIK BIN A RAHMAN (Chairman) Penthouse Suite 1 Main Market of Bursa Malaysia TAN SRI DATO’ SERI SITI NORMA Wisma Mah Sing Securities Berhad BINTI YAAKOB No. 163, Jalan HO KIM POI 57100 Kuala Lumpur STOCK SHORT NAME t 603-9221 8888 NOMINATION COMMITTEE f 603-9222 2833 MAHSING (8583)

TAN SRI DATO’ SERI SITI NORMA AUDITORS INDEX BINTI YAAKOB (Chairperson) ABD MALIK BIN A RAHMAN Deloitte PLT (LLP0010145-LCA) Bursa Malaysia Property Index Chartered Accountants (AF0080) REMUNERATION COMMITTEE Level 16, Menara LGB WEBSITE 1, Jalan Wan Kadir TAN SRI DATO’ SERI SITI NORMA Taman Tun Dr. Ismail www.mahsing.com.my BINTI YAAKOB (Chairperson) 60000 Kuala Lumpur TAN SRI DATO’ SRI t 603-7610 8888 INVESTOR RELATIONS LEONG HOY KUM f 603-7726 8986 ABD MALIK BIN A RAHMAN t 603-9221 8888 BANKERS e [email protected] SECRETARIES Alliance Investment Bank Berhad YANG BAO LING Al-Rajhi Banking & Investment (SSM PC No. 202008002683) Corporation (Malaysia) Berhad (MAICSA 7041240) Bank Islam Malaysia Berhad KUAN HUI FANG CIMB Bank Berhad (SSM PC No. 202008001235) HSBC Amanah Malaysia Berhad (MIA 16876) HSBC Bank Malaysia Berhad Industrial And Commercial Bank of China REGISTRAR (Malaysia) Berhad Malayan Banking Berhad Tricor Investor & Issuing House Maybank Islamic Berhad Services Sdn Bhd OCBC Bank (Malaysia) Berhad (Registration Number: Public Bank Berhad 197101000970 (11324-H)) Public Islamic Bank Berhad Unit 32-01, Level 32, Tower A RHB Bank Berhad Vertical Business Suite, Avenue 3 PT Bank Central Asia Tbk South PT Bank CIMB Niaga Tbk No. 8, Jalan Kerinchi PT Bank Multiarta Sentosa 59200 Kuala Lumpur PT Bank Permata Tbk t 603-2783 9299 The Bank of Tokyo-Mitsubishi UFJ, Ltd f 603-2783 9222 Our Business ANNUAL REPORT 2019 5

OUR VISION

INVENTING SUSTAINABLE FUTURE LIVING THAT ENHANCES QUALITY OF LIFE OUR MISSION

EMPOWERING MARKET QUALITY CARING TRENDS PROMISE

EMPOWERING Anticipating future Delivering our CARING for our people MARKET QUALITY the people, towards personal TRENDS and PROMISE. community and and professional providing the the environment. growth through right solutions. continuous learning. 6 MAH SING GROUP BERHAD Our Business ORPORATE CPROFILE

Mah Sing Group Berhad (Mah Sing) was listed on Bursa Malaysia in 1992 and ventured into property development in 1994.

At present, Mah Sing has 50 projects in , Klang Valley, Penang Island, Johor, as well as Sabah. Mah Sing is one of Malaysia’s fully integrated developers with residential, commercial, hospitality and industrial developments.

A leading property developer in Malaysia, Mah Sing’s diverse portfolio includes high-rise residential projects, masterplanned townships, integrated developments, Grade A office buildings, retail projects, SoHo and industrial developments.

For over two decades, Mah Sing has continuously created iconic developments that have won over 250 domestic and global awards for company performance, corporate governance, product design, concept, innovation and quality. The Group’s efforts to deliver quality homes to meet current market demand was well recognised as the Group clinched various prestigious local and international industry accolades.

In 2019 alone, Mah Sing was voted the winner of “People’s Choice Award” and received the “Visionary Developer Award”, along with the “Best Residential Landed Development” for M Aruna in Rawang at the iProperty Development Excellence Awards, whilst taking home Gold for the Most Innovative and Sustainable Office Design at the Asia Recruitment Awards. Continuing the success story, the Group also won two categories under the Sustainable Development Goals No. 1 (No Poverty) and No. 17 (Partnership for the Goals) for its Mushroom Cultivation Project, an initiative by Mah Sing’s Corporate Responsibility arm, Mah Sing Foundation at the JCI Malaysia Sustainable Development Awards, reinforcing its renewed commitment for best sustainability practices.

Adding onto the elation, the Group was once again ranked as one of the Top 10 Property Developers in Malaysia at The Edge Property Excellence Awards and honoured with the StarProperty.my’s The All Star Award as one of the Top Ranked Developers of the Year, coupled with the ASEAN Property Awards’ Best Developer Award.

As a market driven developer, the Group’s key focus is to enhance life by inventing fit-for-purpose quality product offerings in prime locations with easy access to amenities, connectivity, and ready infrastructures. Upholding its tagline, "Reinvent Spaces. Enhance Life", Mah Sing will continue to build affordably priced products that suit current market demand. Our Business ANNUAL REPORT 2019 7 UXURY MADE L AFFORDABLE

RISING APPETITE FOR MASS MARKET HOUSING M Oscar , Off Kuchai Lama M Luna, M Adora, Wangsa Melawati

Estimated GDV $ RM505 million RM705 million RM378 million Mah Sing celebrated its Silver Jubilee in 2019, marking its 25th year involvement in the property Size development industry. 2019 saw 4.6 acres 5.47 acres 4.5 acres many significant milestones for the Group - especially with the expansion of its landbank with Development High-rise residential three prime land acquisitions in High-rise residential High-rise residential the Klang Valley area. The three new lands are located off Kuchai Lama, Kepong and Wangsa M Oscar is a freehold Located strategically close to M Adora is a residential the Forest Research Institute Melawati, which all came with residence strategically located condominium strategically off Kuchai Lama, within the Malaysia and next to Kepong located in Wangsa Melawati, development orders, enabling vicinity of the well-established Metropolitan Park, M Luna where it is part of Mukim rapid speed to market. These neighbourhood of Happy offers home owners a chance which includes well- to experience the amazing acquisitions make up a total Garden and . It is established townships such as estimated gross development Bukit Forest Reserve designed as an understated view. Built with the “Luxury You , value (GDV) of approximately luxury, with a grand lobby to Can Afford” concept, the and . The project RM1.59 billion and adding up an induce a feeling of awe, project is equipped with is merely 800m away from additional 14.57 acres to the serenity and pride in the home various special features to Middle Ring Road 2 (MRR2), Group’s existing landbanks. This owners. provide residents a complete and linked with a few main augers well for Mah Sing’s quick and balanced lifestyle living. accesses such as Jalan turnaround business strategy, M Oscar is highly accessible Established neighbourhoods Genting Klang, DUKE, Jalan echoing the Group’s proven track via major highways and trunk such as Kepong, Taman Ampang, EKVE, and AKLEH. record of developing products roads such as the NPE, KESAS, Jaya, Bandar M Adora is also within 2.3km that meet the current market KL Seremban Highway, MEX Menjalara, , Taman from Wangsa Maju LRT and and Smart Tunnel. It is also Seri Gombak Sentul are 1.8km from Sri Rampai LRT. demand at strategic locations with only 800m to the upcoming within 3km radius of M Luna. enhanced connectivity and easy Taman Naga Emas MRT 2 The project is also M Adora focuses on providing accessibility. station which targets to be fully surrounded with ready a contemporary and pleasant functional by 2023, with amenities and infrastructures lifestyle for urban dwellers who In line with Mah Sing’s focus to which is perfect for first- shuttle services provided. time home buyers, home enjoy being surrounded by the develop more affordably priced upgraders as well as young city skyline backdrop or having products targeted at first-time M Oscar stands out by itself in couples and families. Home unobstructed scenic mountain home buyers, the three projects the neighbourhood as it owners will be able to have view. The project also offers are aimed to cater to the needs of enables residents to enjoy strategic access to public 35 exclusive facilities, the younger population and urban elevated living at 100m above schools, hospitals and designed to make the sea level. Dubbed “A Jewel healthcare facilities along home buyers’ day-to-day living dwellers who are looking to stay with nearby shopping malls near to the central business Amongst the Stars", M Oscar inspired, safe, convenient and invites the home owners to be and market places. enjoyable. district. part of the celebration of life M Luna is also 3.3km to the and achievement. upcoming Metro Prima MRT2 Station, which is targeted to start operations in 2021, and 4km from the KTM station. 8 MAH SING GROUP BERHAD Our Business ORPORATE CMILESTONES

• Ventured into Penang and launched Southbay. • Expanded into commercial properties with The Icon, Jalan Tun Razak. • Launched maiden township development in Sri Pulai Perdana in Skudai, Johor and introduced the concept of gated and guarded living for link homes in Johor, an unheard concept 19 years ago in Iskandar Malaysia. • Listed on the Kuala Lumpur • Reclassified from industrial nd Stock Exchange (KLSE) 2 sector to property sector on • Continued township development in Board under industrial KLSE 2nd board. Klang Valley with M Residence in sector. Rawang.

1992 1994 2000 2004 2007 2009 2011

• Ventured into property • The Group acquired land for its 1st • Continued i-Parc series industrial development with four township in Klang Valley, Aman developments with i-Parc 1, 2 and 3 in projects. The first project was Perdana. Klang Valley. in in 1994, • The Group shifted its focus from • Expanded presence to Southern Klang comprising single-storey link medium-upper to high-end Valley with Garden Residence, homes. markets in Klang Valley. Launched and Kinrara Residence, • Birth of i-Parc series (Mah first niche high-end project in . Sing’s Industrial integrated Klang Valley, Damansara park). Legenda. • Transferred from 2nd board to main board of Bursa Malaysia. Our Business ANNUAL REPORT 2019 9

CORPORATE MILESTONES (CONT’D)

• The Group further • Unveiled Mah Sing's new corporate logo and • The Group celebrated its 25th anniversary strengthened its foothold in Mah Sing Foundation's new logo. since its venture into the property Klang Valley with • Continued expansion in Klang Valley with development industry. developments such as affordably priced developments such as • The Group acquired 3 new lands in Klang Lakeville Residence in Jalan M Vertica in Cheras and M Centura in Sentul. Valley which are M Oscar (Off Kuchai Kuching and D’sara Sentral in • Added to the Group’s i-Parc series with M Parc Lama), M Luna (Kepong) and M Adora . in Bukit Mertajam, Penang. (Wangsa Melawati). • Grand opening of Ramada by Wyndham Meridin, Johor Bahru.

2012 2013 2016 2017 2018 2019

• Launched Southville City@KL South in • The Group launched its largest Bangi. township by acreage, Meridin East in • Expanded into Kota Kinabalu, Sabah Iskandar Malaysia, Johor, spanning with Sutera Avenue. 1,313 acres.

• Launch of Mah Sing’s very own ‘MY Mah Sing’ app which enhances the customers’ homeownership experience. • Ventured into the hospitality industry with the soft opening of Ramada by Wyndham Meridin, Johor Bahru. • Launch of Aster, Mah Sing’s first project of M Aruna in Rawang that adopts the Industrialised Building System. 10 MAH SING GROUP BERHAD Our Business ORPORATE CSTRUCTURE (ACTIVE OPERATING SUBSIDIARIES)

PROPERTY PLASTICS HOTEL DIVISION DIVISION DIVISION OTHERS

100% Mah Sing Plastics Industries 100% Meridin Hospitality Sdn Bhd 100% Mah Sing Trading

Sdn Bhd Sdn Bhd 100% Vital Routes Sdn Bhd 65% P.T. Mah Sing Indonesia

100% Capitol Avenue Development Sdn Bhd 100% Dsara Sentral Sdn Bhd 100% Elite Park Development Sdn Bhd 100% Enchanting Heights Sdn Bhd 100% Icon City Development Sdn Bhd 100% Mah Sing Properties Sdn Bhd 100% Mestika Bistari Sdn Bhd 100% Mediterranean View Development Sdn Bhd 100% Meridin East Sdn Bhd 100% Major Land Development Sdn Bhd 100% Maxim Heights Sdn Bhd 100% Myvilla Development Sdn Bhd 100% Nature Legend Development Sdn Bhd 100% M Vertica Sdn Bhd 100% Nova Legend Development Sdn Bhd PROPERTY MANAGEMENT 78% Cosmowealth Housing Development Sdn Bhd 100% Oasis Garden Development Sdn Bhd 100% Acacia Springs Management Sdn Bhd 100% Semai Meranti Sdn Bhd 100% Mestika Kenangan Sdn Bhd 100% Southville City Sdn Bhd 100% Quantum Noble Development Sdn Bhd 100% Supreme Springs Sdn Bhd 100% Prima Peninsular Development Sdn Bhd 100% Tropika Istimewa Development Sdn Bhd 100% Uptrend Housing Development Sdn Bhd 100% Venice View Development Sdn Bhd 100% Vienna View Development Sdn Bhd 100% Vienna Home Sdn Bhd Our Business ANNUAL REPORT 2019 11 ROUP FIVE-YEAR GFINANCIAL HIGHLIGHTS FINANCIAL YEAR ENDED 31 DECEMBER

RM’000 2015 2016 2017 2018 2019

Revenue 3,108,506 2,957,617 2,915,791 2,192,933 1,789,693 Profit before tax 503,693 482,939 472,283 347,610 270,219 Profit after tax 384,634 360,312 359,161 270,619 202,593 Profit attributable to equity holders 386,677 361,357 361,895 271,582 200,334

Total assets 6,615,678 6,220,155 7,140,187 6,909,401 6,675,826 Total borrowings 1,500,255 1,005,650 784,478 568,226 570,401 Equity attributable to ordinary equity holders 3,135,622 3,288,,111 3,455,968 3,488,972 3,488,999 Total equity 3,684,095 3,836,127 4,647,609 4,823,678 4,826,367

Return on equity 12% 10% 9% 5% 3% Return on total assets 6% 6% 5% 4% 3% Net gearing ratio 0.04 0.02 N/A N/A N/A Basic earnings per share (sen) 15.73 13.47 12.54 7.83 4.49 Fully diluted earnings per share (sen) 15.35 13.46 12.50 7.83 4.49 Net assets per share (RM) 1.30 1.36 1.42 1.44 1.44 Dividend per share (sen) 6.50 6.50 6.50 4.50 3.35 Dividend payout ratio 40.5% 43.3% 43.6% 40.2% 40.6%@ Price earning ratio 9.2 10.6 11.6 11.7 15.7 Share price as at the financial year end (RM) 1.45 1.43 1.45 0.92 0.71

@ The dividend payout for 2019 is estimated based on number of shares as at 31 December 2019.

REVENUE PROFIT ATTRIBUTABLE EQUITY ATTRIBUTABLE TO (in RM’000) TO EQUITY HOLDERS ORDINARY EQUITY HOLDERS (in RM’000) (in RM’000) 3,108,506 2,957,617 2,915,791 2,192,933 1,789,693 386,677 361,357 361,895 271,582 200,334 3,135,622 3,288,111 3,455,968 3,488,972 3,488,999

’15 ’16 ’17 ’18 ’19 ’15 ’16 ’17 ’18 ’19 ’15 ’16 ’17 ’18 ’19 12 MAH SING GROUP BERHAD Our Business WARDS AND ARECOGNITION

1

2 PROJECT AWARDS ASEAN Property Awards 2018/2019 Property Insight Prestigious • Best Sustainable High-Rise Development Developer Awards 2019 for M Vertica, Cheras • Best Self-Sustained Development for • Best Self-Sustained Township Development Southville City, KL South for Southville City, KL South • Best Family Living Development for • Best Value Creation Development for M Aruna, Rawang M Centura in Sentul • Best High-Rise Development for • Best Overseas Destination Development M Vertica, Cheras for Ferringhi Residence 2, Penang • Best Gated & Guarded Development for • Best Inspired Landed Development for M Residence 2, Rawang Meridin East, Johor • Best City Living Development for • Best Integrated Development for M Centura, Sentul Meridin@Medini, Johor • Best Leisure Living Development for Ferringhi Residence 2, Penang Asia Pacific Property Awards 2019 -2020 • Five-Star Best Residential Development PropSocial People's Property Award for Malaysia for Ferringhi Residence 2, 2019 Tan Sri Dato’ Sri Leong Hoy Kum Penang • Best Value for Money for Savanna Group Managing Director/ Executives Suites, Southville City, Group Chief Executive iProperty Development Excellence KL South Awards 2019 • Best Residential Landed Development StarProperty.my Awards 2019 TAN SRI LEONG’S for M Aruna, Rawang • The Starter Home Award (Excellence) for LIFETIME ACHIEVEMENT The Hazel @ Meridin East, Johor PropertyGuru Asia Property Awards • The Skyline Award (Honours) for AWARDS (Malaysia) 2019 M Vertica, Cheras • Highly Commended in Best Township • The Northern Star Award (Honours) for ASEAN Property Awards 2018/2019 Development (Klang Valley) for Southville Ferringhi Residence 2, Penang • Industry Excellence Award City, KL South • Highly Commended in Best Mid End Malaysia Tatler Ball Awards 2019 Condo/Apartment Development (Klang • Diamond of Excellence Valley) for M Vertica, Cheras Our Business ANNUAL REPORT 2019 13

AWARDS AND RECOGNITION (CONT’D)

3

4

5

6

1.1 . StarProperty.my Awards 2019 4. Property Insight Prestigious Developer Awards 2019 2. iProperty Development Excellence Awards 2019 5. Sin Chew Business Excellence Awards 2019 CORPORATE 3. ASEAN Property Awards 2018/2019 6. The Edge Property Excellence Awards 2019 AWARDS ASEAN Property Awards 2018/2019 PropertyGuru Asia Property Awards (Malaysia) 2019 • Best Developer Awards 2018/2019 • Special Recognition in CSR

Asia Recruitment Awards 2019 Property Insight Prestigious Developer Awards 2019 • Gold in Most Innovative and Sustainable Office Design • Top 10 Developers • Silver in Best Use of Recruitment Technology Tools Sin Chew Business Excellence Awards 2019 BCI Asia Awards 2019 • Property Excellence Award • Top 10 Developers • CSR Excellence Award

HR Excellence Awards 2019 StarProperty.my Awards 2019 • Silver for Excellence in Graduate Recruitment & Development • The Big Heart Award (Excellence) • The All-Star Award Top Ranked Developers of The Year iProperty Development Excellence Awards 2019 • People's Choice Award The Edge Property Excellence Awards 2019 • Visionary Developer Award • Top Property Developers Awards

JCI Malaysia Sustainable Development Awards 2019 • Sustainable Development Goal (SDG) No. 1 (No Poverty) for Mushroom Cultivation Project • Sustainable Development Goal (SDG) No. 17 (Partnership for the Goals) for Mushroom Cultivation Project 14 MAH SING GROUP BERHAD Our Business NAPSHOTS IN S2019

JANUARY FEBRUARY

Mah Sing Foundation launched its MSF School+ at SK Sg. Mah Sing received recognition for supporting the Ministry of Pelong following the success of the programme in SK Kampung Housing and Local Government's National Community Policy. Batu.

MARCH APRIL

Mah Sing supported the Home Ownership Campaign 2019 Mah Sing celebrated its 25th anniversary with over 850 EXPO, which is a collaborative initiative between Real Estate employees and guests during its Annual Dinner. and Housing Developers’ Association Malaysia and Ministry of Housing and Local Government to promote home ownership. Our Business ANNUAL REPORT 2019 15

SNAPSHOTS IN 2019 (CONT’D)

APRIL MAY

Mah Sing partnered with Fave to allow home buyers to go Mah Sing held a topping up ceremony for Phase 1 of its Ferringhi cashless while paying their booking fee with FavePay and be Residence 2 at Batu Ferringhi, Penang. rewarded with AirAsia BIG Points.

JUNE JULY

Mah Sing Foundation held its Young Nation Builders Challenge’s Mah Sing's employees contributed RM6,000 worth of Grand Finale to encourage students to reinvent the surrounding stationaries to 10 Orang Asli pre-schools in collaboration with spaces and enhance the lives of the community. Suka Society in conjunction with the Hari Raya celebration. Mah Sing Foundation also donated RM16,500 to Suka Society's Empowered 2 Teach programme. 16 MAH SING GROUP BERHAD Our Business

SNAPSHOTS IN 2019 (CONT’D)

AUGUST SEPTEMBER

Mah Sing launched its very first National Day video which Mah Sing collaborated with RinggitPlus to introduce Malaysia's encourages Malaysians to look beyond the surface, celebrating first educational home loan application processing chatbot, diversity. "Madam Loan".

OCTOBER OCTOBER

Mah Sing Foundation held its Charity Night in appreciation of its Mah Sing officially launched M Oscar, the first project from its donors and beneficiaries. The Foundation successfully raised 2019 land acquisition trail. The first phase comprising 200 units RM3.6 million in 2019 and continues to benefit over 40 schools were fully sold out during the weekend launch. and NGOs with more than 23,000 beneficiaries. Our Business ANNUAL REPORT 2019 17

SNAPSHOTS IN 2019 (CONT’D)

OCTOBER OCTOBER

The grand opening of Ramada by Wyndham Meridin, Johor Official opening of M Arisa's new sales gallery, marking Mah Bahru, marking Mah Sing's first foray into the hospitality sector. Sing’s second affordable residential development in Sentul, Kuala Lumpur.

NOVEMBER DECEMBER

Mah Sing organised its annual company-wide Corporate Mah Sing officially launched its M Luna Sales Gallery. M Luna is Responsibility initiative at 5 different locations nationwide as Mah Sing’s second residential development in Kepong, and also part of its continuous effort to uplift and enhance the wellbeing the second project from its 2019 land acquisition trail. of the surrounding communities. 18 MAH SING GROUP BERHAD Our Business AH SING MIN THE NEWS Our Business ANNUAL REPORT 2019 19

MAH SING IN THE NEWS (CONT’D) 20 MAH SING GROUP BERHAD Our Strategy & Achievements Our Strategy & Achievements ANNUAL REPORT 2019 21

UR STRATEGY & OACHIEVEMENTS

In line with Mah Sing’s tagline, "Reinvent Spaces. Enhance Life", the Group plans its residential products to be affordable without compromising the quality and facilities to further enhance the lives of home buyers. Mah Sing has shifted its focus to affordable homes since 2013, which augers well for the government's aim to encourage home ownership, especially for first-time home buyers.

Year 2019 was an eventful year for Mah Sing where the Group experienced continuous innovation, aggressive land acquisitions, and quick product launches. In 2020, Mah Sing will continue to expand its footprint and strengthen its presence across Malaysia with quality launches and opportunistic land banking activities, backed by healthy balance sheet.

Mah Sing is also aware of the ever-changing landscape in the property industry. The Group is proactively embracing the digital boom to continue our transformation journey. This is part of the Group's ongoing initiatives to remain competitive and relevant to achieve longevity and sustainability. 22 MAH SING GROUP BERHAD Our Strategy & Achievements ANAGEMENT DISCUSSION MAND ANALYSIS

DEAR VALUED SHAREHOLDERS, WE ARE PLEASED TO PRESENT OUR MANAGEMENT DISCUSSION AND ANALYSIS FOR 2019.

The report highlights Mah Sing’s accomplishments throughout the year as we strive to invent sustainable future living that enhances quality of life. We successfully delivered commendable results, despite the prevailing market conditions in 2019.

OVERVIEW

Mah Sing currently has 50 projects in Greater Kuala Lumpur, Klang We continued to embark on our transformation journey by forging Valley, Penang Island, Johor and Kota Kinabalu, Sabah. We new strategic alliances and partnerships to explore innovative managed to remain resilient and solidified our position as one of opportunities and achieve many more ‘firsts’. This is in line with our the leading property developers in Malaysia. Listed on Bursa aim to shift from a traditional brick and mortar business into a more Malaysia in 1992, the Group has transformed from a plastic trading digitalised entity in accordance with the industry’s current and firm to property development in 1994. future trends.

As a responsible property developer, it is pivotal for Mah Sing to For the 10th consecutive year, we have managed to achieve annual balance between sustainable long-term growth and maintaining property sales in the billion ringgit range. The Group successfully capital discipline, whilst continuously rewarding our shareholders achieved its RM1.5 billion sales target for 2019 and will continue with good dividend payout. Our diversified portfolio comprising to plan strategic launches for products mainly in the affordable residential, commercial, hospitality and industrial properties has segment at prime locations to meet the rising appetite for mass- allowed us to capitalise on our strengths and expertise to future market housing. proof our brand.

2019 was an action-packed year for us. We celebrated our Silver Jubilee, marking our 25th year anniversary as a leading property developer in Malaysia. In line with our growth strategy, we ACHIEVED ANNUAL continued to strengthen our presence by expanding our footprint through new land acquisitions at strategic locations. In 2019, we PROPERTY SALES IN acquired three new lands that came with development orders, th allowing rapid speed to market, which augers well for our quick 10 THE BILLION RINGGIT turnaround business model. RANGE FOR THE 10TH CONSECUTIVE YEAR Our Strategy & Achievements ANNUAL REPORT 2019 23

MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)

From left to right

TAN SRI DATO’ SERI TAN SRI DATO’ SRI SITI NORMA BINTI LEONG HOY KUM YAAKOB Group Managing Chairperson/ Director/ Senior Independent Group Chief Executive 50 Non-Executive PROJECTS Director in Greater Kuala Lumpur, Klang Valley, Penang Island, Johor and Sabah 24 MAH SING GROUP BERHAD Our Strategy & Achievements

MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)

A GLIMPSE OF 2019:

NET PROFIT RM200.3 MILLION

Master plan of Southville City, KL South, Mah Sing’s largest township in Klang Valley

FINANCIAL RESULTS REVENUE For the year ended 31 December 2019, the Group recorded net profit of approximately RM200.3 million and profit before tax of approximately RM270.2 million on the back of revenue of approximately RM1.8 billion. RM1.8 On the property development front, revenue was approximately RM1.4 billion, whilst BILLION operating profit was approximately RM254.6 million, for the year ended 31 December 2019. This was attributable to a higher proportion of new sales secured from new projects where contribution to revenue is expected to increase upon completion of the initial stages of construction. Higher revenue and profit contributions are expected from these projects when construction momentum starts to increase. $ The development projects which contributed mainly to the Group's results include M Vertica in Cheras, M Centura in Sentul, Southville City in KL South, Lakeville Residence in Jalan Kuching, Meridin East and Sierra Perdana in Johor. Other projects, which also contributed, include D'sara Sentral in Sungai Buloh, M Aruna in Rawang, Ferringhi Residence in Penang, Meridin @ Medini and Mah Sing i-Parc in Johor. SALES The plastics segment continued to contribute positively to the Group’s performance. Revenue grew by 7.6% to approximately RM327.1 million and operating profit was approximately RM20.3 million for the financial year ended 31 December 2019. RM1.5 BILLION Our Strategy & Achievements ANNUAL REPORT 2019 25

MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)

Financial Highlights 2018 2019 FYE RM mil RM mil

Balance sheet items Paid-up share capital 1,776 1,776 Total equity 4,824 4,826 Cash and bank balances 1,220 1,063 Borrowings 568 570

No. of shares (unit’mil) 2,428 2,428 Net asset per share (RM) 1.44 1.44

Income statement items Revenue (RM mil) 2,193 1,790 Net Profit (RM mil) 272 200 Basic earnings per share (sen) 7.83 4.49 No. of projects 47 50

DIVIDEND

The Group continues to maintain our proven track record of rewarding our loyal shareholders and we are pleased to announce that the Board of Directors have proposed a dividend of 3.35 sen per ordinary share in respect of the financial year ended 31 December 2019, subject to shareholders’ approval in the upcoming Annual General Meeting.

This marks the 14th consecutive year of uninterrupted delivery on the Group’s minimum 40% dividend payout policy. It remains the Group’s commitment to ensure its shareholders continue to reap benefits from its disciplined approach of sustainable long-term growth.

MINIMUM DIVIDEND PAYOUT OF 40% FOR 14TH CONSECUTIVE YEAR

Icon Residence, 26 MAH SING GROUP BERHAD Our Strategy & Achievements ERFORMANCE IN P2019

REVENUE RM1.8 BILLION

PROPOSED DIVIDEND NET PROFIT 3.35 SEN RM200.3 per ordinary share MILLION

2019

HEALTHY $ BALANCE SHEET High Cash Pile Approximately ACHIEVED SALES OF RM1 REMAINING BILLION LANDBANK RM1.5 BILLION 2,049 maintaining the Group’s ACRES sales consistency in the billion ringgit range since 2010 Our Strategy & Achievements ANNUAL REPORT 2019 27

KEY PERFORMANCE INDICATORS (KPI)

EXEMPLARY DIVIDEND MAH SING FOUNDATION PAYOUT OF MINIMUM DONATED 40% >RM2.1 SINCE 2006 MILLION in 2019 representing an attractive dividend yield of 4.8% in 2019

2020 TARGET Minimum RM1.6 BILLION target sales

2020

WORKFORCE

STRONG GROWTH Property Division Asset Turnover Ratio 814 TRAINING 39% 440 Plastics Malaysia 13,985 on average for the past 5 years HOURS (above comparable peers’ Plastics Indonesia for employees in 2019 5-years average of 19%) 627 117 Hotel Division 28 MAH SING GROUP BERHAD Our Strategy & Achievements

MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)

KEY HIGHLIGHTS IN 2019

25th Year Anniversary in Property Development Industry Expanding Footprint in Prime Locations

The year 2019 marked Mah Sing’s Silver Jubilee, celebrating our Properties in the affordable range and at strategic locations with 25th anniversary since our involvement in the property good accessibility remains highly sought after. We are seeing development industry, transforming into one of the leading growing interest in this segment, which has returned buyers’ property developers in Malaysia. Leveraging on our experience purchasing confidence - supported by the government’s proactive and expertise in the property development industry, we have measures in introducing various property-friendly incentives and adopted the right strategies - backed by the right culture that campaigns to stimulate the overall industry. This has propelled Mah enhances the Group’s competitiveness and strengthens our Sing to continue eyeing for more prime lands to build products that capacity to remain ahead of the curve. meet the current market demand.

We take pride in understanding the market’s needs and tailoring 2019 was an exciting year for Mah Sing - from new land deals, our strategies to suit demand. We are known for our nimble forging new strategic collaborations, to new sales gallery openings business model where we are always quick to adapt to the and property launches. Our unwavering efforts to invent new changing market conditions, whilst aligning our business strategies innovative ways to enhance our value proposition has enabled us with the trends and movements in the market. Since 2013, our to catapult our presence further. focus has been in the affordably priced homes in response to the current and future market needs. In 2019, we have been actively on the lookout for suitable lands Our practice of fast execution and financial prudence has also and successfully acquired three prime lands in Klang Valley. We contributed to the success of our transition. Our timely shift in acquired M Oscar (Off Kuchai Lama), M Luna (Kepong), and product mix with successful project launches within the affordable M Adora (Wangsa Melawati), which all came with approved segment and right location focus where demand remains resilient, development orders, enabling us to market the projects swiftly to has laid down a strong foundation for us to reach greater heights. meet current market demand. All three land acquisitions in 2019 were ready for quick turnaround and immediate development, As a result, Mah Sing has one of the leanest balance sheets amongst which fits our business model. its comparable peers, enabling us to continue opportunistic landbanking and replicate earlier success with fast turnaround model. Backed by healthy balance sheet with cash and bank balances of Mah Sing’s track record in earnings delivery and project execution approximately RM 1 billion as at 31 December 2019, Mah Sing is ripe has instilled confidence amongst institutional shareholders, bankers to continue replenishing our prime lands with key focus in the and other stakeholders. We remain committed to become the leader affordable segment. in affordable housing in Malaysia and continue to offer affordable homes which comes with premium features - catering to the growing demand in Malaysia.

Artist impression of the aerial view of M Luna, Kepong Artist impression of the facilities podium of M Oscar, Off Kuchai Lama Our Strategy & Achievements ANNUAL REPORT 2019 29

MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)

Artist impression of the cantilevered, glass-walled Techno-Gym of M Adora, Wangsa Melawati

Review of Operations

In the Plastics division, our Plastics Malaysia recorded 38% of operational sales and revenue from export, and the majority sales and revenue derived were in US dollar denomination.

As for the Property division, we continued to roll out more projects in the market and strengthening our property portfolio, which comprises a good mix of city centre and sub-urban developments, ranging from residential, commercial, hospitality to industrial projects.

PORTFOLIO COMPOSITION STRATEGIC LOCATION MIX (remaining gross development value + unbilled sales)

GREATER KL/ KLANG VALLEY JOHOR PENANG 20 7 5 Projects Projects Projects (69%) (21%) (10%)

BROAD PRODUCT OFFERINGS (remaining gross development value + unbilled sales)

RESIDENTIAL (HIGH-RISE AND LANDED) RM15.4 billion (61%)

COMMERCIAL (SHOPS, OFFICES, RETAIL, HOTEL) RM8.3 billion (33%)

INDUSTRIAL RM1.4 billion (6%)

REMAINING LANDBANK REMAINING GROSS DEVELOPMENT VALUE + UNBILLED SALES

2,049 acres RM25.1 billion

* Statistics as at 31 December 2019 30 MAH SING GROUP BERHAD Our Strategy & Achievements

MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)

Focusing predominantly in Greater Kuala Lumpur, we plan our residential products to be affordable without compromising the quality and facilities to further enhance the lives of home buyers. The projects introduced in 2019 included M Oscar, M Arisa, M Luna, M Adora, M Vertica’s fourth tower, Basil@M Aruna, and The Acacia in our Meridin East Township, Johor.

Our exciting new launches in 2019 began with M Oscar (Off Kuchai Lama) - launched in the first week of October 2019. M Oscar, the first introduction from our 2019 land acquisition trail saw good take up during its weekend launch, where the first phase comprising 200 units were fully sold. Designed as an understated luxury development, it enables residents to enjoy elevated living at 100m above sea level, which offers sceneries of the surrounding Sales gallery opening of M Oscar, Off Kuchai Lama neighbourhood. M Oscar also provides a 2.7 acres facility deck designed with multiple zones, allowing the community to de-stress and forge stronger bonds.

M Arisa is our second residential development in Sentul, following our previous successful project - M Centura, which garnered overwhelming response of over 90% take-up rate. The public preview for M Arisa together with the official unveiling of its sales gallery was held in November 2019, followed by its official launch in February 2020. M Arisa will include Sentul’s very first 2 acres multi-level sky garden - themed Urban Forest.

We continued to inject more excitement in the market in 2019 with M Luna’s sales gallery official opening in December 2019. Located 5km from Lakeville Residence in Taman Wahyu, one of Mah Sing’s matured developments, the project will enjoy the amazing Bukit Lagong Forest Reserve View as it is situated close to the Forest Research Institute Malaysia, Kepong and next to the Presentation of M Luna's unique selling points to YB Tan Kok Wai during the sales gallery opening. Kepong Metropolitan Park. M Luna is expected to be launched in the second quarter of 2020. Journey to "Reinvent Spaces. Enhance Life"

Mah Sing is best known to develop products that are tailored specifically to meet the needs and wants of the buyers today. From the location, amenities and facilities as well as the pricing points, our products are built to meet current market demand. Our Strategy & Achievements ANNUAL REPORT 2019 31

MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)

Sales gallery opening of M Arisa, Sentul Artist impression of The Acacia in Meridin East, Johor

Moreover, M Adora, our third project from 2019’s land acquisition opened its registration of interest exercise in December 2019 and will be launched in Q3 2020. The project is a contemporary urban sanctuary which offers breathtaking views of serene mountain range and vibrant city skyline to the residents. Strategically located in Wangsa Melawati, M Adora is merely 800m away from the Middle Ring Road 2 and is highly connected with a few main accesses. The project is also within 1.8km from Sri Rampai LRT, with shuttle service provided.

Other than the new projects from 2019’s land acquisitions, we also launched the fourth tower of M Vertica, Cheras in October 2019. The project is a transit-adjacent development, only 500m away from the LRT and MRT Interchange station and 700m from the Taman Permata MRT station. M Vertica’s 4.5 acres facilities Artist impression of M Vertica's Clubhouse deck which houses more than 40 facilities, coupled with its accessibility to key roads makes it ideal for first-time home buyers, young family and investors. Mah Sing will also be developing a dedicated ramp from Jalan Cheras into M Vertica. In the Southern Region, we had several launches in 2019 within our Meridin East Township in Johor comprising a mixture of In addition, we also rolled out Basil @ M Aruna in the first quarter residential and commercial developments. On the residential side, of 2019, which is part of the Phase 1 of M Aruna township we launched The Orchid; The Hazel; The Acacia and Rumah development in Rawang, following the introduction of Aster @ Mampu Milik Johor, along with commercial projects such as Ixora M Aruna in late 2018. M Aruna is a township 5km from Aeon Commercial Centre and Meridin East’s single storey medium cost Rawang, spanning across 96.71 acres of land - featuring double- shops. Situated in Pasir Gudang, Iskandar Malaysia, Meridin East storey linked homes. is a guarded township that is planned for development over the next 9 to 12 years. The 1,313 acres integrated mixed development is Mah Sing’s biggest development by acreage and is located strategically near Pasir Gudang, which is soon to be upgraded to city status with a population of over 560,000 people. 32 MAH SING GROUP BERHAD Our Strategy & Achievements

MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)

Collaboration with RinggitPlus for Madam Loan, first of its kind artificial Hong Kong's renowned superstar, Eric Tsang was appointed as Mah Sing's intelligence-enabled for a Malaysian property developer Brand Ambassador. He is also a proud owner of M Vertica in Cheras

STRATEGIC PARTNERSHIPS FOR INNOVATIVE DRIVING FORWARD MARKETING INITIATIVES TO BOOST SOLUTIONS SALES

At Mah Sing, we always strive to continue to innovate and form In 2019, we diversified our customer base, whereby we conducted strategic partnerships, cementing our position as one of the leading various marketing initiatives i.e. private events with personalised Malaysian property developers in efforts to evolve into a consultations targeted at foreign buyers in view of the sustainable and lasting brand. overwhelming interest garnered abroad. Our projects have been receiving continuous interests as it fits the property criteria that they Echoing our transformation journey, 2019 saw us forging alliances are looking for, coupled with our delivery track record and word of with brands that are at the forefront of the digital boom. We are mouth recommendation. The Kuala Lumpur and Penang hotspots adapting to the advancement of various digital platforms and are the most familiar places to our international buyers, being the leveraging on the strength of innovative marketing initiatives to popular and strategic areas for tourists and businesses in terms of reach out to wider market segments. location, infrastructures and amenities. Other than Kuala Lumpur and Penang, we also showcased our development in Johor for the Offering Cashless Options for Buyers to Book Property in buyers who desire to stay at the modern Special Economic Malaysia Investment Zone of Medini, which offers enticing incentives for foreign investors. In April 2019, Mah Sing and Fave, a well-known digital payments platform formed a strategic partnership, which enabled home Subsequently, Mah Sing forged a special relationship with Eric buyers to go cashless while paying their booking fee with FavePay. Tsang, Hong Kong’s renowned superstar, welcoming him as Mah This collaboration was another leap forward in Mah Sing’s digital Sing’s official Brand Ambassador. He is also now a satisfied owner innovation journey to meet consumers’ changing demands. This is of our M Vertica in Cheras. This a testament that Mah Sing’s Mah Sing’s next step in its ambitious pursuit to integrate products are in line with the needs and wants of the foreign buyers digitalisation in every part of the home ownership journey - from similar to how strong we are in Malaysia. sales and marketing; construction management; quality assurance; customer experience and property management. Continuing our strategy to develop various marketing initiatives to drive sales and in support of the government’s national Home Introduced Malaysia’s First Educational Home Loan Ownership Campaign to promote home ownership, we also Application Processing Chatbot launched the “RM500,000 In Your Bank” campaign, which offered various benefits for all types of buyers, as well as the “Refer In September 2019, Mah Sing in collaboration with RinggitPlus N’Reward” campaign that rewards eligible referees who introduced launched "Madam Loan", the first of its kind artificial intelligence- their family members and friends to purchase a Mah Sing property. enabled chatbot for a Malaysian property developer. The Other campaigns introduced in 2019 included the Spin & Win development of this technology product was sparked by a series Campaign and the Lock & Win Campaign, which rewarded home of feedback received by Mah Sing from home seekers over the last buyers of participating projects with various incentives and several years. Madam Loan is an educational platform, which opportunities to win amazing prizes. facilitates home loan applications. Potential home buyers can get answers on home loans related questions and submit their housing loans application at any time via Madam Loan. Our Strategy & Achievements ANNUAL REPORT 2019 33

MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)

Summit Park at Southville City, KL South

MAIDEN FORAY INTO HOSPITALITY SECTOR

In October 2019, Mah Sing held the official grand opening of Leveraging on our expertise as an experienced property Ramada by Wyndham Meridin, Johor Bahru (Ramada by Wyndham developer, Mah Sing’s involvement for the PDL included Meridin). The hotel is operating under a franchise agreement renovation works i.e. interior designing provisions as well as the between Mah Sing and Wyndham Hotels & Resorts and is supply of furniture. Our kiosks were utilised to make the library as equipped with approximately 644 rooms. This is the largest in an attractive place for youths and adults to acquire and share Southeast Asia by room count under the Wyndham Hotels & knowledge. Resorts. Ramada by Wyndham Meridin has garnered good occupancy rates from both business and leisure travellers since The PDL comprises 3 main areas i.e. registration (640sq ft), digital its soft launch last year. library (790sq ft), and lounge area (1,922sq ft) which makes up a total area of approximately 3,352sq ft. Open daily from 10am - 10pm, the PDL will be able to house approximately 60pax ENHANCING & BUILDING COMMUNITY at one time. It is well equipped with public Wifi connection, laptops & tablets, as well as smart televisions for displaying e-books and Introduction of Summit Park at Southville City other relevant information.

Mah Sing introduced the Summit Park at Southville City, KL South, Incorporating Sustainable Practices our largest township development in Klang Valley. This 9.62 acres park which acts as a ‘Green Sanctuary’ is deemed as one of the In efforts to build a lasting brand, Mah Sing continues to pioneer public park playground in Malaysia that complies with the incorporate sustainability into our business practices. international safety standards certified by the Playground Safety Association of Malaysia. It is equipped with covered and open We are enhancing our sustainability policy and framework, which picnic areas furnished to offer al-fresco dining experience would allow us to map out the most effective approach in scattered throughout the park. The playground area, considered achieving our goal to transform the business into not just a profit as one of the largest public park playground in the state, spans centric entity, but an organisation that focuses on its people, its over 800 square metres. There are also meditation areas and over surrounding communities and the environment. 20 different outdoor gyms and par-course facilities equipped for outdoor workout and meditation sessions. In addition, Mah Sing also promotes inclusiveness in our business by addressing all stakeholder’s concerns and interests through Opening of Penang Digital Library at Southbay Plaza constant two-way engagement.

Mah Sing supported the opening of Penang’s Digital Library (PDL) We are aligning our strategic direction with the United Nations in Southbay Plaza, Batu Maung as one of the main sponsors in Sustainability Development Goals with key emphasis on: support of the state government’s aim to transform Batu Maung into the next attraction hub, which is part of the second phase of i. Goal 4 - Quality Education the Tourism, Technology, Transportation, and Tranquillity (4Ts) plan. ii. Goal 8 - Decent Work & Economic Growth iii. Goal 12 - Responsible Consumption & Production

More information on our sustainable achievements can be read in our standalone Sustainability Report 2019. 34 MAH SING GROUP BERHAD Our Strategy & Achievements

MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)

Mah Sing Foundation partners with Hopes Malaysia for Mega Scale Mah Sing’s annual Corporate Responsibility initiative Gravity Water Project

Uplift & Enhance the Community through Mah Sing Foundation

Through our Corporate Responsibility arm, Mah Sing Foundation For the second consecutive year, Mah Sing’s employees (MSF), we continue to uplift and enhance the wellbeing of the nationwide came together for the Group's annual Corporate surrounding community - especially the underserved children. Responsibility initiative. As a responsible property developer, our employees, including the senior management team performed In 2019, MSF collaborated with Hopes Malaysia to enhance the their social duties by giving back to the society through sustainable lives of five villages in Kota Belud, Sabah through the Mega Scale initiatives aimed at enhancing the wellbeing and livelihood of the Gravity Water Project. The project was aimed at providing surrounding community. The project positively impacted more than sustainable and clean water supply through the gravity water 5,000 individuals with the support from 445 volunteers - system to support the villagers’ farming activities and basic daily accumulating approximately 1,780 total volunteer hours. needs. The project has enabled approximately 3,400 villagers to have access to sustainable water supply and assisting three More information on MSF’s contributions and impacts can be read villages with its agriculture activities. on pages 60 to 68 of our Sustainability Report 2019.

MSF’s 2019 Impact At A Glance

Health & Wellbeing Community Total Development Donation in 2019: 7% More than 47% RM2.1 million Education 46%

Supported Over Impacted More Than 40 schools 23,000 and NGOs Individuals Our Strategy & Achievements ANNUAL REPORT 2019 35

MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)

Lakeville Residence, Taman Wahyu, Kepong Artist impression of Ferringhi Residence 2, Penang

MANAGING ANTICIPATED OR KNOWN RISKS

The Group will continue to adhere to its prudent financial policy of Safety precautionary measures were initiated at Mah Sing's offices maintaining a healthy balance sheet. This will ensure it remains and sales galleries i.e. daily contactless body temperature checks, flexible to respond to land acquisition and investment promoting the usage of face masks within the organisation, opportunities as they arise. The Group will continue to look out for implementing hand sanitizer stations, increased the frequency of potential land acquisitions, joint ventures and investments, mainly cleaning and sanitizing of the premises as well as educating and in Greater Kuala Lumpur, Klang Valley and Johor. The Group is reminding MSians on personal cleanliness and best hygiene focused in finding acceptable growth opportunities whilst practices. mitigating major risks. On the external front, Mah Sing also carried out various measures to In any financial year, some fluctuation of the Group’s revenue, ensure that its valued customers are well taken care of. Following profit and operating cash flow may occur depending on the sales the implementation of the Movement Control Order, Mah Sing performance, value and construction progress of the projects leveraged on its digital tools through the execution of various undertaken especially for our projects that are still at the initial technology-based measures across all aspects of its business and stages. It is also subjected to internal and external headwinds such operations. This included the utilisation of collaboration tools for all as trade war, geopolitical factors, and other macro-economic employees to remain fully operational, whilst working from home; influences. All of the Group’s projects are at different stages of consolidated all communications via its Customer Service Hotline, construction in order to allow the Group to have sustainability in Email, Social Media Channels, as well as MY Mah Sing App; terms of profit and cash flow. showcased products through online platforms as most new projects are available for viewing via virtual showrooms - backed by the As with any business, the Group may face competition from its Group’s property advisors which were made available for live video peers. With a strong branding, strategically located land banks as chat to service potential buyers. well as an established track record, the Group will continue to take measures to address the competition risk such as conducting As a responsible corporate citizen, Mah Sing has been doing its market intelligence studies to understand buyers’ needs, part to limit COVID-19’s spread and impact. The Group together monitoring and adjusting development products and marketing with MSF presented a pledge of 20 units of heavy duty critical- strategies in response to changing economic conditions and care ventilators worth RM3.9 million for National Disaster market demand. Management Agency, to front line hospitals in need. This is part of the Group’s RM4.175 million pledge in support of the fight against Initiatives against COVID-19 Pandemic the COVID-19 pandemic, which included Personal Protective Equipment for Johor government front liners, whilst 150,000 face The world was shocked by the COVID-19 pandemic, which has masks have been allocated for five government agencies. Ministry disrupted daily routines and lives. Individuals and businesses were of Home Affairs, Ministry of Housing and Local Government, deeply affected by this unprecedented event. Dewan Bandaraya Kuala Lumpur, Penang and states each received 30,000 pieces of face masks. MSF also contributed Since the outbreak, the Group initiated ongoing communications via RM100,000 worth of medical supplies to medical institutions in the MComm, the official interaction platform with its internal stakeholders city of Wuhan located in China’s Hubei Province, which was the - the employees (also known as MSians) in efforts to keep the epicentre of the pandemic. This was in collaboration with Group's greatest asset abreast of the safety measures and provide Malaysian relief organisation #OpsHarapan, which has direct regular updates on the COVID-19 outbreak. access to hospitals there. 36 MAH SING GROUP BERHAD Our Strategy & Achievements

MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)

Carya, Phase 2 of M Aruna, Rawang Artist impression of Sensory Residence, Southville City, KL South

PROSPECT AND OUTLOOK Plastics Division

Incorporated in Malaysia on 15 October 1979, Mah Sing Plastics challenging as the current situation has dampened the consumer Industries Sdn Bhd (MSPI) is a wholly-owned subsidiary of Mah sentiment and market confidence. However, the government has Sing. With over four decades experience as a plastics come out with immediate measures to address the challenges manufacturer, MSPI intends to leverage on its expertise in plastics faced by the industry. The introduction of the RM20 billion and injection manufacturing to become the market leader. With the RM250 billion stimulus packages for the people, and the additional complete commissioning of a new manufacturing plant with fully RM10 billion stimulus package for SMEs serve as catalysts to installed production lines in December 2019, MSPI intends to stimulate not just the property market but also the overall optimise capacity utilisation to achieve better gross profit. economic growth. The recent interest rate and statutory reserve MSPI has grown to become a trusted supplier of durable and high requirements ratio cuts, as well as the 6 months moratorium period quality products i.e. a wide range of plastic products including for all loan and financing repayments are also timely and much industrial containers, furniture, motorcycle safety helmets, pallets needed. These measures ensure the vulnerable sectors i.e. the and more. In efforts to remain competitive, MSPI will remain focus B40, the mass M40 and SMEs would get immediate cash injection on integrating energy consumption efficiency into the business and incentives. This will in turn spur consumer sentiment, which is productivity such as utilisation of Solar Power System, which is a key factor in property purchase. in line with its ongoing efforts in becoming a more sustainable entity and making products that are more competitively priced. Looking ahead, Mah Sing believes the medium to long-term To meet the market demand, MSPI aims to continue initiating new outlook will continue to be resilient for property buyers who are ideas and product offerings as well as new selling mechanisms buying to own or investment as Malaysia has entered this to secure the future and growth of the company. unprecedented period from a position of strength, with a healthy financial system, strong domestic institutional investors, adequate Property Division buffers and robust policy frameworks in placed. Property remains as one of the best hedges against inflation and is amongst the Market sentiments in 2019 indicated that the appetite for mass safest forms of asset class. market housing remains strong as products in the affordable segment at strategic locations continue to dominate the market. Malaysia has a large young population with majority being below Thus, Mah Sing is geared up to roll out many new exciting launches 40 years old. This group of people have a higher demand to buy and creating many more ‘firsts’ in 2020. property, especially those who are starting out new families. Mah Sing is in a healthy position to match the supply and demand gap The property market has a multiplier effect on more than 140 especially in the affordable segment on the back of the Group’s industries and is very much reliant on domestic consumption. proven track record of delivering fit-for-purpose products that There were various measures introduced in Budget 2020, which meets the needs and wants of buyers today. are expected to enable the property market to maintain steady growth. Among the key measures announced included: Reducing In addition, Mah Sing has a consistent financial track record with the foreign ownership threshold value for high-rise properties in high asset turnover at an average of 39% for the last 5 years. With urban areas from RM1 million to RM600,000; Improvement in Real our healthy balance sheet of approximately RM 1 billion cash and Property Gains Tax policy; Introduction of Rent-to-Own Scheme for bank balances as at 31 December 2019, the Group is well first-time home buyers for properties up to RM500,000; and the positioned to acquire new land banks especially in the Klang Valley extension of the Youth Housing Scheme by Bank Simpanan area. At present, Mah Sing’s remaining landbank is at 2,049 acres Nasional. The Group understands the COVID-19 outbreak has with remaining GDV and unbilled sales of approximately RM25.1 certainly impacted our country's economy and the property billion as at 31 December 2019, providing earnings visibility for at industry. The short-term outlook for property market will be least 8 years. Our Strategy & Achievements ANNUAL REPORT 2019 37

MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)

Eazy to Own Campaign

2020 TARGET

Affordability remains as the key focus in home ownership today. Entering the new decade, innovation will also remain as one of the Mah Sing has been focusing on providing affordably priced homes key components for Mah Sing to evolve and excel in this of good quality and we will remain committed to continue matching competitive industry. This is deeply embedded in our company the market’s demand in 2020 with 84% of our target sales from culture and we will be looking at different ways to enhance our residential properties priced below RM700,000. business processes, partnerships and products.

The Group will also carry on the momentum to roll out new In addition, 2020 is going to be another year of opportunities for launches in 2020 to achieve our sales target of minimum us to continue to grow our land bank in Malaysia on the back of RM1.6 billion with key focus in Greater Kuala Lumpur, Klang Valley, our proven track record and established brand presence, primarily Penang Island, and Johor. within the Central region. Therefore, we intend to increase our portfolio in Greater Kuala Lumpur in the next 2 to 3 years, with Concurrently, in line with the Group’s tagline, "Reinvent Spaces. conditions such as strategic location, good connectivity and Enhance Life", Mah Sing launched the "Eazy to Own" campaign in accessibility, as well as favourable payment terms. the first quarter of 2020, an initiative targeted at first-time home buyers offering easy entry with low upfront costs and On behalf of the board, we would like to extend our deepest affordability with great incentives and savings for home buyers. appreciation to our shareholders, business associates, home buyers, the government and local authorities for your Mah Sing will continue to strengthen our market presence in 2020 continuous support towards Mah Sing. We are committed to with product line-ups that are tailored specifically to meet the continue inventing sustainable future living that enhances the buyers’ current needs and wants. Our exciting projects in Greater quality of life. This is a promise that we make to all our home Kuala Lumpur for 2020 include M Adora in Wangsa Melawati, buyers. M Luna in Kepong, M Arisa in Sentul, along with many other planned launches - focusing in the affordable segment.

Embarking on the new financial year, we will continue to adopt 2020 TARGET SALES FOR RESIDENTIAL resilient strategy of quick turnaround business model to acquire PROPERTIES: prime lands at strategic locations, whilst being nimble and flexible to change. This would also include maintaining our culture of fast execution and financial prudence, which has been the fundamentals of Mah Sing to stand the test of time - allowing us to continue enhancing our shareholders’ value. 84%