Receiving the MDA 2025 trophy from Housing and Local Government Ministry secretary-general Datuk Wira M Noor Azman Taib (second from right) was IOI Properties Group Bhd property development (Malaysia) group chief operating officer Teh Chin Guan (second, from left) as Star Media Group chairman Tan Sri Wong Foon Meng (left) and FIABCI-Malaysia president Dr Yu Kee Su look on.

Using PBT complements MDA’s updated system

The MDA's quantitative assessment underwent a major upgrade last year with the critical inclusion of Profit Before Tax (PBT) as a key metric for evaluating the financial health of listed property companies. This strategic move perfectly complements the MDA’s updated system, which now allows for a holistic company evaluation using publicly available data, eliminating the need for developers to submit sensitive, additional financial details. Focusing on PBT creates a much more equitable comparison across the entire field, especially benefiting the assessment of large conglomerates where proprietary profit breakdowns for specific property divisions are rarely public.

Analysts understand that revenue, while important, merely reflects the total income from transactions; profit, however, offers the most nuanced view of a company's true financial health and operational efficiency. For sophisticated investors, the PBT figure is non-negotiable, as it lays bare the actual monetary gain achieved after all costs of development and delivery are covered. By scrutinising profit performance, the MDA can effectively gauge a developer's genuine earning potential, evaluate its profitability and identify any potential areas of financial leakage, ensuring only the most operationally sound companies secure the highest rankings.

Paramount Corporation Bhd deputy group chief executive officer Beh Chun Chong (left) receiving the MDA 2025 trophy from Housing and Local Government Ministry secretary-general Datuk Wira M Noor Azman Taib.

A fairer comparison in 2025

For this year's awards, the MDA has strategically designated PBT as a critical metric, guaranteeing a more consistent and equitable assessment across all companies. This deliberate shift is particularly important for developers whose property operations are embedded within larger conglomerates, which often do not publicly disclose specific net profit figures for individual divisions. By focusing on PBT, the MDA achieves a clearer and more uniform comparison by reflecting the company's core profit growth while strategically excluding the impact of taxes, which can vary significantly between different companies and jurisdictions.

However, the evaluation remains laser-focused on profit growth over time. Companies are rigorously assessed on their financial performance across three consecutive years—from 2022 to 2024, using 2021 as the foundational base year. Developers that consistently demonstrated positive profit growth throughout this demanding period were heavily prioritised in the rankings. Similar to the Revenue Growth attribute, points are systematically awarded to firms for sustained, consistent performance across the three-year duration. Furthermore, the assessment includes an analysis of a developer's profit as a percentage of revenue, giving definitive preference to those firms that exhibit superior profitability relative to their total income.

TOTC Quantitative rankings – Profit Growth

In the Top-of-the-Charts (TOTC) rankings, profit growth was a pivotal factor. For companies in the RM1bil and above category, IOI Properties Group Bhd secured the top spot in the profit growth attribute, achieving three consecutive years of positive growth as well as achieving the highest score for profit as a percentage of revenue in the RM1bil and above category. 

Similarly, in the below RM1bil category, Paramount Corporation Bhd excelled in profit growth, earning it the highest score and securing its position as the leader in this attribute. An interesting observation was that Malton Bhd had the highest score for profit as a percentage of revenue for both category tiers.

By focusing on profit before tax, the MDA 2025 underscores the importance of profitability and growth as key indicators of a company’s financial health, giving investors a clearer view of the companies best positioned to generate sustainable value in the future.

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