Paramount Corporation Bhd - Acquisition of Strategic Landbank
Thu, 19-Mar-2026 07:32 am
by Tan Wai Wern • Apex Research

Counter

PARAMON (1724)

Target Price (RM)

1.46

Recommendation

Buy

  • Paramount is acquiring 3.70 acres of freehold land along Jalan Ampang for a total consideration of RM257.9m.

  • The Group intends to develop the site into two blocks of high-end serviced apartments, leveraging an existing development order secured by the vendor.

  • We are constructive on the acquisition, given its close proximity to the Group’s previously successful developments.

  • Maintain a BUY recommendation with higher target price of RM1.46 (from RM1.40), derived from a 50% discount to revised RNAV, incorporating a three-star ESG rating.

Prime Land Acquisition. Paramount’s wholly owned subsidiary, Meridian Kuasa Sdn Bhd, has entered into a sale and purchase agreement with IOI Properties Berhad to acquire 3.70 acres of freehold land along Jalan Ampang, Kuala Lumpur, for a total consideration of RM257.9m. The acquisition is in line with the Group’s strategy of securing well-located urban sites with strong development potential, particularly in areas where it has an established track record. The site is located within the prestigious U-Thant enclave, with close proximity to lifestyle, healthcare and education amenities. The purchase will be funded through a combination of internally generated funds and bank borrowings.

 

Intended Development. The Group intends to develop the site into two blocks of high-end serviced apartments, leveraging an existing development order secured by the vendor. This provides a meaningful speed-to-market advantage, enabling more efficient project execution with a targeted launch by end-2026 and an estimated development timeline of approximately six years post-launch. The proposed project is expected to generate a gross development value (GDV) of approximately RM1.1bn.

 

Our View. We are positive on the acquisition, given its close proximity to the Group’s previously successful developments, Ashwood and Atrium. This allows the Group to leverage its familiarity with the location and the strong market reception of its earlier projects to deliver another well-positioned residential offering. The acquisition implies a land cost-to-GDV ratio of 23.4%, slightly above the Group’s recent acquisition average. However, we view this premium as justified, supported by the project’s shorter time-to-market, lower execution risk and proven take-up rates of nearby developments.

 

Outlook. The Group’s outlook remains constructive, with total projected landbank GDV rising to c.RM8.8bn post-acquisition, which is expected to sustain long-term revenue visibility while supporting its FY26 property launch target of RM1.1bn. This is further supported by unbilled sales of RM1.5bn, providing a solid earnings base as project construction progresses. Assuming 80% debt funding, we estimate the acquisition would raise the Group’s gearing, with debt-to-equity increasing from 0.81x to 0.95x on a pro-forma basis, while net gearing rises to 0.77x. Nonetheless, we view this as manageable, supported by the Group’s strong development pipeline and earnings visibility.

 

Earnings Revision. We lift our FY27F earnings forecast by +17.8%, driven by the inclusion of contributions from the newly acquired project.

 

Valuation. Following the incorporation of this project into our valuation model, we estimate a 3.8% accretion to our RNAV. Accordingly, we maintain our BUY recommendation with a higher TP of RM1.46 (from RM1.40). This is based on an unchanged 50% discount to our revised RNAV of RM1.8bn. 

 

Risk. Failure to monetise non-core assets, exposure to the cyclicality of the property sector and rising construction costs.

Read more details in:

Disclaimer

The report is for internal and private circulation only and shall not be reproduced either in part or otherwise without the prior written consent of Apex Securities Berhad. The opinions and information contained herein are based on available data believed to be reliable. It is not to be construed as an offer, invitation or solicitation to buy or sell the securities covered by this report.

Opinions, estimates and projections in this report constitute the current judgment of the author. They do not necessarily reflect the opinion of Apex Securities Berhad and are subject to change without notice. Apex Securities Berhad has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.

Apex Securities Berhad does not warrant the accuracy of anything stated herein in any manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against Apex Securities Berhad. Apex Securities Berhad may from time to time have an interest in the company mentioned by this report. This report may not be reproduced, copied or circulated without the prior written approval of Apex Securities Berhad.

Market Mover
Settlement Rates
Currency Buy Rates (RM) Sell Rates (RM)
USD 3.904824 3.932412
EUR 4.518520 4.523835
CNY 0.569767 0.570393
HKD 0.498103 0.501644
SGD 3.058844 3.080621