• Overview. Mah Sing Group Berhad (Mahsing) 4Q22’s net profit surged by 7% to RM46.8mn from RM40mn in 4Q21 backed primarily by higher property sales and revenue recognition of property projects under construction.

• Key Highlight: Mahsing's Q422 financials exhibited robust revenue growth,  with total sales soaring to RM670.9mn, representing a 24.8% uptick from the corresponding period in 2021. This was due to 1) higher property sales and revenue recognition of property projects under construction, thanks to several key developments such as M Vertica in Cheras, M Arisa in Setapak, M Luna in  Kepong, M Aruna in Rawang, Meridin East in Johor, M Oscar in Sri Petaling, M  Adora in Wangsa Melawati, and Southville City in KL South, and 2) consistent and robust demand for plastic pallets and automotive parts throughout the year.

• Against Estimates: Inline. Mahsing’s 12M22 net profit was in line with our estimates though revenue of RM2,317.2mn surpassed our projections,  bolstered by overwhelming demand for affordable housing.

• Dividend. A first and final DPS of 3 sen was declared (FY21: 2.65 sen), implying a payout ratio of 46%.

• Outlook. Mah Sing's business outlook for FY23 is promising, as the company has a strong pipeline of projects. Notably, the Group's decision to raise its sales  target to a minimum of RM2.2bn (FY21: RM2.0bn) for 2023 is indicative of its growth prospects. Taking into account all new lands acquired to-date, Mahsing  has a remaining land bank of 1,922 acres with a remaining GDV of RM21.4bn

• Our Call. Maintain a BUY call on the stock at a TP of RM0.81, based on 65% discount to RNAV

Source: BIMB Securities Research - 1 Mar 2023