Brighter prospects ahead. We anticipate that MAHSING is on course to achieve a stronger financial performance in FY23 on the back of (i) acceleration in progress billings as the labour shortage condition has been fully resolved; (ii) sustained sales momentum given the scale up in launches in 2H23; (iii) absence of Prosperity Tax and perpetual sukuk payment. During 1H23, MAHSING achieved a solid sales performance, recording approximately RM1.2bn, equivalent to 55% of its RM2.2bn sales target for FY23. Notably, the group currently has an unbilled sales amounting to RM2.34bn, translating to 1.27x of its FY22 property development revenue.

In terms of new project launches, MAHSING continues to experience encouraging take-up rate, owing to factors such as (i) affordable price point; (ii) strong brand equity and (iii) strategic location. For instance, M Nova, launched in August 2023 with an affordable starting price point of RM328k, has already achieved an impressive 90% take-up rate for its Tower A, with Tower B set to launch in 3Q23. Additionally, the recent JV with Liberty Triangle for the development of "M Zenya," a 4.88-acre residential project with an estimated GDV of RM500m in Kepong, is expected to attract strong interest. M Zenya benefits from its location as one of the last available plots of development land surrounding the Kepong Metropolitan Lake. Surrounding projects, such as Mizumi Residence and Residenci AVA, have also seen robust market interest, with the former being fully taken up and the latter achieving a 98% take-up rate.

Looking beyond FY23, we anticipate that MAHSING may start to add in higher-priced products to its launch pipeline with higher profit margins. This transition is facilitated by the easing of overhang in the mid-to-high range high-rise property segment. The company possesses ready landbanks in locations like Penang, Southville City, Icon City, and Semenyih, allowing it to cater to this higher price range product segment.

Higher high formation. Technically, MAHSING is trading near its uptrend support region of RM0.83-0.85, with indicators on the mend. In view of a higher high formation, MAHSING is set advance further toward RM0.92-0.95-0.97 region. Cut lost at RM0.80.

Collection range: RM0.84-0.85-0.87

Upside targets: RM0.92-0.95-0.97

Source: Hong Leong Investment Bank Research - 13 Oct 2023