PARAMON: Northern Region Developments Underpin Sustained Growth, BUY Rating Maintained
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
TA Securities has reaffirmed its “BUY” recommendation for the company, maintaining its target price following a comprehensive two-day site visit to its key northern region developments. The investment bank noted the company’s robust and enduring presence in the region, attributing sustained confidence to strong project execution and strategic landbank expansion.
Performance Review and Current Progress
The site visit provided an in-depth look at ongoing projects, including the Embun Hill township in Bukit Mertajam, Utropolis Batu Kawan (UBK), and developments in Lunas and the Bukit Banyan township in Sungai Petani. Across all key developments, particularly in UBK, Embun Hill, and Bukit Banyan, consistent construction progress and encouraging take-up rates were observed.
At Embun Hill, the commercial component, comprising 30 units of two-storey shop offices, has been fully taken up. Residential Phase I, launched in August 2025, has garnered steady interest, with cluster homes achieving approximately 60% take-up and two-storey terraces at roughly 46%. In UBK, the Savana (Phase 4) project is nearing completion with approximately 95% sales achieved, while Seiras Residences (Phase 5) has recorded an estimated 50% take-up for the launched units, with construction currently at Levels 11-12 and completion targeted for 2028.
Strategic Landbank and Future Outlook
The company’s northern region portfolio is strategically positioned for long-term growth, now contributing an estimated RM3.8 billion in future Gross Development Value (GDV), representing 49% of the group’s total remaining GDV. This expansion is bolstered by recent land acquisitions, including a RM946 million GDV parcel in Lunas and a RM744 million GDV parcel in Batu Kawan, providing clear visibility for phased launches over the next five to eight years.
These developments are aligned with strong demand drivers, such as affordability, increasing interest from upgraders in Bukit Mertajam and Sungai Petani, and population growth linked to thriving employment hubs like Batu Kawan Industrial Park (BKIP) and Kulim High Tech Park (KHTP). Looking ahead, Embun Hill Phase 2 is scheduled for launch next year, and the maiden launch for Lunas is targeted for 2027.
Investment Thesis Reaffirmed
TA Securities’ reinforced view highlights steady demand fundamentals and visible execution across the company’s key developments. The report underscores the company’s resilient and scalable platform in the northern region. Future launches are planned to be sequenced in a disciplined, demand-driven manner, ensuring product relevance and maintaining pricing discipline amidst evolving market conditions, including the entry of new competitors.
