Mah Sing Case Analysis Essay

Recommendations and Lessons Learned Mah Sing Group Berhad has shown outstanding performance throughout the years from 2013 to 2015. Some lessons that can be learned from the company have been identified. Firstly, the company has a high level of cash pile estimated to be RM1.1bil in 2015 which is double of 2014. Deposits, cash and bank balances consist of monies received from purchasers and also for the payment of property development expenditure incurred. High cash piles offers security against tough times and provide the company more options for future growth. Company ought to keep enough cash to cover their financial obligations as well as near-term cash requirements and hold a little bit more in case of any emergencies. Cash-rich Mah Sing …show more content…
The financial position of the company depicts the company has an increasing trend of total borrowings from RM1.1bil in 2013 to RM1.5 bil in 2015. These borrowings mainly consist of payables for acquisition of development land, joint venture developments on land and construction of development projects. However, Mah Sing still able to maintain low gearing ratio due to increasing total assets and total equity. Part of the newly land held for property development are pledged to financial institutions as security for then redeemable convertible secured and term loans. Although the lands acquired are financed by loans and securities, the development projects in the near future are not only able to cover their debts but have large potential in generating greater development value. Mah Sing issued new ordinary shares as well as share premium arose from the exercise of warrants and ESOS, rights issues, private placement and other issuances of shares to obtain more …show more content…
Talam with vast amount of land bank could develop and establish township segment of the property market to create a vibrant mixed development of residential and commercial properties offering superb entertainment facilities, and relaxing recreation and leisure centre. This type of large scales well-planned development projects is risky but the return is good. Besides, Talam could refine their partnership for growth business model with a view towards raising equity funding at the project level. This enables the company to acquire sizeable strategic lands without over-extending their cash flows. The company invite like-minded institutional or corporate partners to co-invest in and fund the