- We maintain our BUY call on Mah Sing Group with an unchanged fair value of RM3.60/share, which is at parity to its NAV/share. Mah Sing has proposed to buy 1,051 acres of freehold land in Seremban for RM360mil. Excluding 91 acres that are subject to land acquisitions by authorities, the net area is ~960 acres. This translates into an implied land cost of ~RM8.60/share which we deem as attractive given its deep development appeal.

- After the successful launch of its Southville City@Bangi project (>80% take-up rate for Phase 1 of Savannah Executive Suites and Avens Residence), this new landbank will enable Mah Sing to embark on its largest ever freehold township project within KL South.

- The indicative GDV is RM7.5bil over a development period of seven to eight years. It is slated to kick-off by early-2015 with an initial registration of interests.

- The proposed development would feature affordable residential homes (with indicative prices starting from RM350k per unit) as well as commercial components within a gated and guarded setting.

- More importantly, we expect the project to be well-received. Location-wise, the said land is situated south of Seremban and straddles the North South Expressway (NSE) with 2.5km direct frontage on both sides of the highway. A direct interchange to the NSE – similar to Southville – has been mooted.

- Located only ~2km away is the Sg.Gadut KTM Station that connects to KL Sentral and Rawang (> 50 daily trips). Future accessibility could be further boosted by the proposed Senawang-KLIA highway and KL-Singapore Highway Speed Rail.

- The project can cater for spillover demand from the burgeoning South Klang Valley Corridor (including Cyberjaya, Putrajaya, KLIA & KLIA2) as well as upgraders from Negeri Sembilan (population base: ~ 1 million) and neighbouring Malacca.

- The wide catchment area along the busy NSE and the growing working population within the nearby industrial/business centers (e.g. Senawang Industrial Park) could also open up more opportunities for commercial products.

- The inclusion of the Seremban land would bump up Mah Sing’s remaining GDV to ~RM40bil (including unbilled sales of RM4.6bil). This is in line with its strategy to focus on affordable products, with 87% of new residential launches for 2014 to be priced below RM1mil. We maintain our forecast and recommendation for now pending further updates.

Source: AmeSecurities