Investment Highlights

• We maintain our BUY call on Mah Sing Group (Mah Sing) with an unchanged fair value of RM0.79 per share, based on a 60% discount to its RNAV (Exhibit 2). We make no changes to our FY20–22 net profit forecasts.

• Mah Sing officially launched its latest project M Luna over the weekend (13–14 June 2020) at its sales office, near the project site. M Luna is sitting on a 5.47-acre leasehold land, featuring two 57-storey towers and 1,672 units of serviced apartments. The project has a GDV of approximately RM705mil. The land is located 200m from the 235-acre Kepong Metropolitan Park with a 140-acre lake (Exhibit 1). Targeted towards the middleincome segment, M Luna’s prices start from RM385K (RM550psf) per unit for the 700 sq ft. unit with 2-bedroom and 1–2 parking bays while the RM491K (RM491psf) 1,000 sq ft. 4- bedroom unit comes with 2 parking bays. During the launch, Mah Sing secured an overwhelming response of 90% take-up rate on its first phase of M Luna.

• M Luna is touted as an understated luxury yet affordable serviced apartments featuring multi-tier security system, electric vehicle charging station, dedicated shuttle bus service to KTM and MRT stations, playground, covered walkway, swimming pool, gymnasium, and many other facilities.

• Moreover, M Luna is surrounded with established amenities such as the Kepong Metropolitan Lake, FRIM, commercial zones, hospitals and schools.

• We expect the project to be well received given its strategic location along the MRR2 (within 5km from DUKE, NKVE and LDP) and a growing young population in that area. In terms of public transportation, the site is located about 3km from the upcoming Metro Prima MRT2 station and 4km from the Taman Wahyu KTM station.

• On top of that, Mah Sing is planning to launch its next project M Adora, located at Wangsa Melawati in middle of July 2020. Management indicated similar selling prices psf for M Adora for the new project and will reveal more information closer to the launching date.

• We make no changes to our FY20–FY22 earnings forecasts at this juncture. We believe the long-term outlook for Mah Sing remains positive backed by strong sales achieved in the past few quarters. Moreover, we expect the new projects in Klang Valley to be strong sellers given their strategic locations and attractive pricing. We viewed the recent selldown on the stock as a buying opportunity with an undemanding P/BV of 0.2x and a potential upside of more than 40%, hence we are maintaining our BUY recommendation.

Source: AmInvest Research - 15 Jun 2020