- We maintain our BUY call on Mah Sing Group with an unchanged fair value of RM2.38/share. Mah Sing is reported to be preparing the launch of Phase 2 of its Ferringgi Residence development on Penang Island.

- The upcoming launch of Ferringhi Residence 2 comes after the early success of Ferringhi Residence, which has a take-up rate of c.86% to-date.

- The former will be developed on approximately 7.3ha of freehold land along the tourism belt of Batu Ferringhi (GDV: ~RM735mil).

- The project consists of 632 units with built-up from 1,208 sq ft to 2,910 sq ft at a price range of RM845k-RM2mil.

- For this purpose, we understand that Mah Sing has recently unveiled its new sales gallery at Menara Boustead to showcase its projects in the north. In total, Mah Sing has a land inventory of 82 acres in Penang that could last the group between five to eight years. Hence, the imminent award of the Project Delivery Partner (PDP) contract for the Penang Transport Master Plan (PTMP) bodes well for the group’s upcoming developments in Penang.

- The PMTP is expected to provide a significant kick to Penang’s property market when various public transportation and infrastructural improvements take off.

- The Star reported that Mah Sing is targeting to generate between RM300mil and RM350mil of new property sales in Penang – making up ~11% of the group’s overall projected sales for this year.

- Apart from Ferringhi Residence 2, some of the key launches for this year include new phases at Lakeville Residence, D’Sara Sentral, Meridin Bayvue@Sierra Perdana, Bandar Meridin East and Sutera Avenue. New projects include M Residence 3 (Rawang) and Icon Residence at Georgetown.

- Mah Sing is currently trading at a deep 46% discount to its NAV with a robust GDV pipeline of RM44bil. The group has sought a one-month extension (i.e. until 26 August 2015) to conclude the SPA for the proposed acquisition of an 89-acre land in Puchong for RM657mil.

Source: AmeSecurities Research - 30 Jul 2015