KUALA LUMPUR: Menang Corp (M) Bhd will look into fresh acquisitions when its coffers see cash from the disposal of non-core assets.

“We are also looking into acquisitions, if possible of income-generating assets as well,” said Menang managing director and chief executive officer Too Kok Leng. “These may include buildings.”

The potential acquisitions would be in the Klang Valley, he told The Edge Financial Daily after the group’s annual general meeting last Thursday, adding that the current property market downturn offers opportunities.

Pressed further on the acquisitions, Too said: “Good property assets, preferably income-generating.”

He said the group is currently negotiating the disposal of two more non-core assets, which he categorised as financial assets.

“Whatever we can monetise and get a fair value, we will monetise and get the cash back. Then we will concentrate on the 450 acres (182.11ha), part of a big township, which we will redevelop over the next two to three years.”

The 450-acre land is part of the Seremban 3 development in Negeri Sembilan, for which the replanning has started.

Too said the group will look at how to redevelop the site in accordance with the market’s needs, adding that the group had developed infrastructure for the parcel. Too said Menang would not undertake any launches for now.

The group has announced it is selling its concession business to Widad Group Bhd for RM122 million. The concession manages the Universiti Teknologi Mara Seremban 3 campus via Menang’s unit Inovatif Mewah Sdn Bhd (IMSB).

Menang’s subsidiaries Menang Development (M) Sdn Bhd and Menang Industries (M) Sdn Bhd control 71% of IMSB, and Tentu Selesa Sdn Bhd the remaining 29%.

The two Menang subsidiaries will sell their collective stake in IMSB, and Tentu Selesa its 29% stake — subject to the terms and conditions of a share sale and purchase agreement to be entered later.

Menang, in its latest annual report, reported that it owns 13 pieces of land totalling 729.55 acres. In net book value of the property held by the group, it totals RM242.88 million.

Except for two industrial plots in Klang, with leases expiring in 2103, all of the parcels are freehold.

Notably, nine of the parcels were acquired in 1998. The group’s most recent purchases in 2004 were three agricultural tracts in Negeri Sembilan.

The parcel for the Seremban 3 project, acquired in 2001, is the most valuable and largest tract the group has recorded.

For the financial year ended June 30, 2019 (FY19), Menang’s net profit declined 82.31% to RM2.35 million, from RM13.3 million last year. As a result, its earnings per share fell to 0.49 sen for FY19, from 2.77 sen for FY18.

That said, its top line remained relatively flat, declining 1.57% to RM42.11 million, from RM42.78 million in the corresponding period last year.

The group attributed the significantly lower net profit to reversals of impairments stemming from certain investment properties and write-downs in inventories amounting to RM20 million in FY18.

Last Friday, the group announced a net loss of RM503,000 for 1QFY20, versus a net profit of RM967,000 for 1QFY19. The group said the loss was due to expenses stemming from land and earthworks clearing. Its quarterly revenue declined 21.43% to RM22,000 from RM28,000.

Menang’s share price closed last week at 34.5 sen, valuing the group at RM165.88 million. The stock’s five-year high was on July 19, 2016 when it closed at 57.8 sen. Its five-year low of 29 sen was on Aug 22, 2019.