- Maintain BUY rating on Mah Sing Group with a higher fair value of RM3.74/share (from RM3.70/share) – at parity to its NAV. This is to factor in new land purchases in Rawang. Mah Sing’s 1HFY13 surged 16% YoY to RM139mil – or 49% of both consensus and our full-year estimates.

- The strong earnings trajectory in 1H was largely driven by progress billings from several key projects: (i) Garden Plaza, Cyberjaya; (ii) M Suites (Jln. Ampang), M Residences, M City; and (iii) Kinrara Residences.

- We expect Mah Sing’s pre-sales momentum to accelerate strongly in 2H13, underpinned by scheduled previews of the following new projects: (i) Lakeville Residence (4Q13); (ii) Southville City Phase 1 (Sept-2013); and (iii) D’ Sara Sentral Phase 1 (Sept-2013).

- Notably, we are bullish on the take-up rates for Phase 1 of Southville (total GDV: ~RM1.5bil) comprising of apartments, linked-homes and shop lots. The soon-to-belaunched Savanna Executive suites (priced from RM280k above) is set to ride on growing demand for affordablypriced apartments (<RM350k) – where there is a void in supply within the Klang Valley currently.

- To be sure, Savannah has achieved >18k registrants by mid-August. Furthermore, the completion of a dedicated interchange to the North South Expressway should further enhance the deep development potential of Southville.

- For existing projects, Phase 2 of Meridin@Medini Phase 2 (GDV: RM600mil) is due to be open for viewing next month shortly after the launch of the Tower B for Phase 1 (first two blocks: 81% take-up since launch in March 2013). Over in Kota Kinabalu, Sutera Avenue’s service apartments are set to be previewed by the end of this month.

- Mah Sing also revealed yesterday, the purchase of another 96 acres of land in Rawang for RM69mil (~RM16psf) – its fifth land deal for 2013. This is a timely and strategic move, as the new injection of land – to be branded as M Residence 3@Rawang - would complement the rising development potential of Mah Sing’s existing M Residence 1 & 2 projects located just 5km away.

- The first three phases of M Residence 1 – nearing its tailend - have been sold-out while M Residence 2 has achieved over 90% take-up since its debut in March 2013. With M Residence 3 in its stable, Mah Sing would have 480 acres of township land in Rawang with a total GDV of c.RM2.1bil.

- Earnings visibility is intact, backed by unbilled sales of RM3.9bil (2.5x its FY12 property turnover) and total outstanding GDV of RM28bil. New sales was RM1.5bil in 1H13, and is on track to achieve its FY13F target of RM3bil.

Source: AmeSecurities