- Maintain BUY on Mah Sing with a higher fair value of RM3.03/share (+3%), based on an unchanged 25% discount to its NAV, as we adjust our FD share base to incorporate its rights issue (1-for-3) and warrants (3-for-5).

- Mah Sing has entered into an agreement with Pulangan Elit Sdn Bhd to acquire a 6.5-acre piece of land in Sg.Buloh for RM85mil (RM298 psf). The said land is to be developed into a mixed-development project named D’sara Sentral: - Phase 1: 264 units of SoVo (size from 750 sq ft) and retail-units (97) from RM650 psf onwards; - Phase 2: Service residences (896 units).

- The estimated GDV is RM800mil over a development period of three to five years (average plot ratio: 4x). The SoVo products are set to be launched first by 1Q14.

- We believe the project would be a sell-out, as it is strategically located diagonally opposite the upcoming MRT station next to the RRIM land. This is only within a 5km-10km radius from matured neighbourhoods in greater Sg.Buloh (e.g. Sierramas, Kota Damansara, Kepong, TTDI, Selayang).

- To be sure, our checks reveal that the latest launch of Tropicana Gardens– located adjacent to another proposed MRT stop in Persiarian Surian – has been fully-taken up at indicative prices of RM750 psf to RM800 psf.

- Star Avenue – another of Mah Sing’s projects launched in mid-2011 and located on the other end of the RRIM land fronting Jln Sg.Buloh – has also been taken with prices for 3-storey shop offices/retail units reaching ~RM750 psf.

- More importantly, D’sara Sentral would give Mah Sing firstmover advantage over the future launches at the highlyanticipated RRIM integrated development.

- Hence, this new project would undoubtedly add to Mah Sing’s expanding pipeline of projects, further solidifying its targeted sales of RM3bil for this year. Other noteworthy maiden projects that are slated for launch soon include Southville City in Bangi and Meridin@Medini.

- Mah Sing’s earnings are very much secured with strong unbilled sales of RM3.2bil, and backed by a healthy GDV of RM16.6bil. As such, our revised FD NAV has been raised to RM4.03/share (FY14F earnings: +2%).

- Mah Sing is fast-morphing into a leading entrepreneurdriven property developer in Malaysia. The stock is currently trading at a steep 44% discount to its revised FD NAV estimate of RM4.04/share.

Source: AmeSecurities