PETALING JAYA: ML Global could expect a better financial performance for their financial year 2018 and 2019 as analysts are confident the company to perform positively due to their activities in affordable housing despite the slowdown in the property market.

RHB analyst Soong Wei Sang forecasted an encouraging financial performance by the company as the MGB’s initiative to secure more external jobs in the affordable housing space and sizeable outstanding orderbook of RM2.1bil.

According to the report, MGB could record net profit growth of 71% and 21% in FY18 and FY19 respectively.

“Global Bhd’s (MGB) prospects would be underpinned by strong backing from its parent, LBS Bina Group (LBS) as the majority of its wholly-owned property projects are awarded to MGB.

“Despite the slowdown in the property market, LBS has clocked an impressive three-year compound annual growth rate (CAGR) of 26% in new property sales to reach RM1.2bil in FY16. This could be due to its strategic market position and focus on medium and medium-to-high end property development projects,” Soong said.

He also added that the combined construction entity following the injection of MITC Engineering Sdn Bhd (MITC) would help MGB to secure more external jobs given the larger business scale

and platform to tender for bigger external construction contracts.

“With the Government’s ongoing efforts to provide more affordable housing and pledge to

build 1 million units of affordable houses by 2018, MGB is looking to capitalise on the huge opportunity by targeting this segment of the market,” he said.

Soong has also hailed the decision by MGB to enter into a memorandum of understanding (MoU) with Sany Construction Industry  Development (M) Sdn Bhd (Sany Malaysia) for its industrialised building system (IBS) precast manufacturing business.

“As the Government is looking to enforce 50% IBS usage in the private sector and 70% in the public sector by 2018, the expansion would reduce MGB’s dependence on labour and thus be less susceptible to labour shortages, while more cost savings can be derived in the long run in view of rising labour wages,” he said.