Mah Sing’s 4Q13 results were in line with expectations.  FY13 sales met management’s  and our MYR3bn  target but, while  the company  did not indicate its official  FY14 sales target, we expect the same amount to be repeated. Four months after the 2014 Budget announcement, we believe the  current valuations have largely priced in the negative impact of  the cooling measures. Therefore, we upgrade Mah Sing to BUY.

• In  line.  Mah  Sing’s  4Q13  results  were  within  our  and  market expectations.  Full-year  earnings  grew  21.7%  on  the  back  of  13% revenue  growth. Its balance sheet has strengthened substantially,  with a net gearing of 16%, post its rights issue exercise last year. A single-tier 8 sen dividend was declared, slightly higher than the 7.6 sen paid in FY12
• MYR3bn sales in FY13.  Mah Sing achieved MYR3bn in new property sales in FY13,  in line with management’s target and analysts’ fo recasts.Key projects that contributed include M City (MYR260m), M Residence 1 (MYR322m),  Icon  City  PJ  (MYR264m),  Meridin  @  Medini  (MYR561m) and  Mah  Sing  i-Parc  (MYR256m).  Going  forward,  about  MYR3-4bn worth of projects will be put into the market this year,  like  Southville City link homes, Dsara Sentral, Lakeville Residence and Bandar Meridin East in  Johor.  Meridin  East  is  slated  for  preview  in  2Q14.  Phase  1,  which comprises linked semi-detached homes (1,800 sqf built-up), 2-storey link homes (1,500 sqf) and semi-detached houses (2,200 sqf) will be priced from MYR400k, MYR300k and MYR500k respectively.
• Outlook for FY14.  In line with the industry, Mah Sing has also turned more cautious in guiding  on  new sales target.  Nevertheless,  we  expect the company to at least maintain the same amount of sales this year.
• Forecasts. We  fine-tune  our FY14  earnings  forecasts  after  we  update the latest FY13 numbers.  Unbilled sales, meanwhile,  were topped up to MYR4.4bn from MYR4.2bn in 9M13.
• Upgrade to BUY. We believe the sector’s valuations have largely priced in  the  negatives,  and  market  sentiment  and  property  demand  should gradually  recover  from  the  sluggish  4Q13-1Q14  period.  Thus,  we upgrade  Mah  Sing  to  BUY  with  an  unchanged  MYR2.44  FV,  which  is based on a 15% discount to RNAV. 

Financial Exhibits

SWOT Analysis

Company Profile
Mah  Sing  has  many  projects  across  the  key  states  in  Malaysia.  The  company,  which  adopts  a  fast  turnaround  model  in  property development, has both niche and township projects that underpin its earnings.

Recommendation Chart

Source: RHB