No changes to our earnings forecasts and target basis of a 10% premium over RNAV, which is still at the lower end of the 10-40% range that leading developers can command in a property upcycle. Mah Sing remains an Outperform and our top pick in the sector. Its strong earnings growth, new sales and landbanking should provide re-rating catalysts. 

Mah Sing management that participated in one-on-one meetings at the CIMB Annual Asia Pacific Conference include executive director Dato' Steven Ng, senior GM of corporate finance Khaw Bee Nee and senior executive of investor relations Tan Lee Kuan. The focus at the meetings was on the company's major projects in the Klang Valley, Iskandar Malaysia, Penang and Sabah as well as its landbanking efforts. 

What We Think 

Although there were no major surprises from the meetings, we note that the group is on track to meet or exceed its targets. 1Q new sales of RM750m are in line with its full-year target of RM3bn. But we expect future quarters to be strong as the response to the Meridin@Medini project has been overwhelming while the flagship RM5.13bn Southville township will be launched in 4Q. In terms of landbanking, YTD the group has acquired four parcels of land with GDV of RM7.8bn, exceeding its target of RM6bn. Including the enhancement to Southville's GDV of RM1.5bn, total GDV has been boosted by RM9.3bn or 62% to RM24.2bn. 

Investors should continue to accumulate Mah Sing as the group provides investors the best exposure to a pure Malaysian property play with an excellent track record for execution. Newsflow on landbanking should remain active in 2013 as the group can acquire another RM700m worth of landbank comfortably.

Source: CIMB Daybreak - 21 June 2013, Full PDF Report