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Paragon Globe Berhad’s Strategic Disposal Reinforces Value-Unlocking Capability and Highlights Undervaluation in Johor’s Rising Property Cycle

Paragon Globe Berhad (PGB) continues to demonstrate disciplined capital management and strategic balance-sheet optimisation through its latest proposed disposal of a 5.4451-hectare freehold parcel in Tanjung Kupang, Johor to GSP Automotive Malaysia Sdn. Bhd. for a cash consideration of RM64.47 million.

The transaction crystallises an estimated net gain of RM22.14 million, substantially above the land’s book value of RM25.97 million and more than double its acquisition cost of RM24.34 million in 2025.

The disposal proceeds will be directed toward loan repayment (RM35.46 million), resulting in lower gearing and annual interest savings of approximately RM0.96 million, with the remainder allocated to working capital and future project deployment. This financial outcome underscores the Group’s ability to unlock value from its landbank while strengthening cash flow resilience and funding flexibility.

Importantly, the Group has clarified that the transaction does not compromise the viability of the broader industrial development originally planned for the area. The land formed part of a larger proposed industrial and workers’ accommodation development with a total GDV of RM537.9 million; PGB intends to realign the development plan and proceed with the remaining land parcels, preserving long-term project value.

When viewed within the broader context of Johor’s property and industrial uplift, the disposal outcome is notable. PGB’s landbank is strategically positioned within high-growth zones such as Tanjung Kupang, Iskandar Puteri and Pulai—areas benefitting directly from structural catalysts including the Johor–Singapore Special Economic Zone (SEZ), the upcoming RTS Link, and rising cross-border industrial demand. The transacted price achieved in this disposal further validates the underlying market value of these assets, which the equity market continues to underappreciate.

On a relative basis, PGB remains one of the most undervalued listed developers in Johor, trading below the implied value of its strategically located land assets and potential recurring-income projects. The demonstrated ability to monetise land at significant premiums reinforces the mismatch between the Group’s asset values and its current market valuation.

With the disposal expected to complete by 4Q 2026, PGB will enter its next development phase with a strengthened balance sheet, clearer capital allocation pathway, and improved financial headroom to execute its GDV pipeline. Combined with Johor’s accelerating industrial and infrastructure cycle, the Group is positioned to benefit from both improved sentiment and increasing investor attention on developers with high-quality landbanks in prime economic corridors.

This latest exercise enhances visibility on value creation, supports balance-sheet optimisation, and underscores PGB’s position as an undervalued yet strategically advantaged Johor developer with re-rating potential.

$PGB (0091.MY)$

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