We like MAHSING due to its “fast turnaround” strategy that enables it to crystalize on land value, generate strong cash flows within a short period and lower upfront costs. As MAHSING offers exposures to property and glove manufacturing businesses, the group is expected to ride earnings rebound from its property division and a new stream of glove earnings amid sustainable demand from the permanent structural shift in hygiene awareness. We expect FY20 to be a bottomed year and remain upbeat on the longer-term prospects from key projects such as M Vertica and M Centura which are currently in their early stages of construction. Meanwhile, the commencement of its glove venture starting in Apr 2021 will provide a meaningful boost to FY21/22 earnings. The stock is trading at 10.9x FY21 P/E (16% below its 5Y mean), supported by a strong FY19-22 earnings CAGR of 26% and decent FY21-22 DY of 4.6-5.7%.

Further strength ahead amid a successful triangle breakout. From a high of RM1.47 (20 Oct), MAHSING’s share price tumbled 43.8% to a low of RM0.825 (7 Jan) before staging a bullish triangle breakout to 0.905 last Friday. As long as share prices stay above RM0.88 (30D MSA) immediate support, the stock may resume its uptrend to retest RM0.975 (17 Dec) levels. A successful breakout above RM0.975 (50% FR) will lift prices higher towards RM1.03 (50% FR) before reaching our LT objective at RM1.14 (38.2% FR). On the flipside, a breakdown below RM0.88 will trigger further sell down towards RM0.825 (7 Jan low) levels. Cut loss at RM0.81.

Source: Hong Leong Investment Bank Research - 11 Jan 2021