• Acquired Cheras KL and Bukit Mertajam Penang land

• Terminated the acquisition of Shah Alam Golf Course land

• Sold 51% equity interest in Kota Kinabalu Convention City

• Neutral on the news

• Earnings estimate maintained

• Maintain NEUTRAL with TP of RM1.59

Acquired Cheras KL and Bukit Mertajam Penang land. Mah Sing Group Berhad (MAHSING) has announced its proposal to buy 11.23 acres of 99-years leasehold land in Cheras, KL (at Batu 2.5 Jalan Cheras) for RM263m. It has also acquired a 10.89 acres of freehold development land in Bukit Mertajam, Pulau Pinang for RM43.8m. Refer Page 2 for the details for of these land deals.

Terminated the acquisition of Shah Alam Golf Course land. MAHSING and the vendor of 85.43 acres of land in Sultan Salahuddin Abdul Aziz Shah (KGSSAAS) Golf Course, Selangor has mutually agreed to terminate the sales and purchase agreement.

Sold 51% equity interest in Kota Kinabalu Convention City. MAHSING sold its 51% equity interest in Convention City Development Sdn Bhd (Convention City) to Diverse Capital Sdn Bhd (DCSB) for RM6.6m.

Neutral on the news as the impact to RNAV is limited. On the positive side, management focus on the Klang Valley and affordable projects should bode well for sales and earnings in the near term.

Earnings estimate maintained. We maintain our earnings estimate for both FY17 and FY18. The contribution from Cheras KL and Bukit Mertajam Penang land are neutralised by the termination of projects from Shah Alam and Kota Kinabalu.

Maintain NEUTRAL with TP of RM1.59 based on discount to RNAV of 25%. Our TP is lowered by RM0.03 after updating our RNAV to reflect the land deals above. Despite the reduction in TP, the stock is supported by its decent dividend of 4.1%.

Source: MIDF Research - 4 Jul 2017