KUALA LUMPUR (May 6) — Paramount Corporation Bhd is steadily building up its funding war chest through perpetual securities, having issued RM190 million so far under its RM500 million programme — a move that highlights both financial discipline and strategic flexibility in navigating the current property cycle.
The latest issuance of RM90 million, combined with an earlier RM100 million tranche, reflects a measured capital-raising approach rather than an aggressive drawdown. Structured under an unrated perpetual securities programme established in 2019 via Securities Commission Malaysia guidelines, the facility allows Paramount to raise funds progressively as needed, primarily to support working capital requirements.
What I Learned: Why Perpetual Securities Matter
One key takeaway is how perpetual securities function as a hybrid financing tool. Unlike conventional debt, these instruments typically have no fixed maturity, giving developers like Paramount greater flexibility in managing cash flow without immediate repayment pressure. At the same time, they are often treated partially as equity by rating agencies, which can help moderate gearing levels.
For a property developer operating in a cyclical market, this structure is particularly useful. It allows the company to maintain liquidity while continuing project execution, especially when paired with a sizeable orderbook.
Strong Orderbook Supports Near-Term Visibility
Paramount’s RM1.5 billion orderbook as at end-2025 provides earnings visibility over the next few years. This suggests that despite macro uncertainties, the group still has a steady pipeline of projects contributing to revenue and cash flow.
However, the balance sheet tells a more nuanced story.
Debt Position Reflects Ongoing Capital Needs
As at Dec 31, 2025, Paramount recorded net debt of RM919.9 million, with total borrowings and lease liabilities of RM1.25 billion outweighing its cash position of RM331.5 million. This indicates a relatively leveraged position — not uncommon for developers — but one that reinforces the importance of flexible funding tools like perpetual securities.
Valuation: A Market Disconnect?
Perhaps the most striking insight is the company’s current valuation metrics. Trading at a price-earnings ratio of 5.3 times and a price-to-book ratio of 0.4 times, Paramount appears to be priced at a significant discount compared to many peers.
This could signal a few possibilities:
- Market concerns over leverage levels
- Cautious sentiment toward the property sector
- Or simply an undervaluation relative to its fundamentals and orderbook strength
Closing Insight
Paramount’s approach underscores a broader lesson in property development finance: capital structure flexibility is just as important as landbank and sales. By pacing its fundraising through perpetual securities while maintaining a solid project pipeline, the group is positioning itself to weather market cycles — even as its current valuation suggests the market remains unconvinced.
For investors and industry observers, the disconnect between fundamentals and valuation may be where the real story lies.
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