• Maintain NEUTRAL and MYR0.65 TP, 8% upside with 5% FY22F yield. Mah Sing is expanding its mid-range high-rise residential property developments – badged under M-Series – to Johor. We are mildly positive on it acquiring new land, as the new project will be surrounded by a mature neighbourhood, with access to various amenities. However, given the relatively small GDV of this project, we make no change to our TP.

• Buys new land in Seri Austin, Johor. Mah Sing announced its acquisition of a new 6.398-acre parcel of freehold land in Taman Seri Austin in Johor, for a consideration of MYR39.29m from United Malayan Land. The price translates to a land cost of MYR130 psf, which is reasonable for the area. Mah Sing plans to fund the land via a combination of internal funds, bank borrowings, as well as proceeds from the recent disposal of a small land parcel in Permatang Tinggi in Mainland Penang (MYR49m). The transaction is expected to be completed in 1H23.

• Strategic location of the land. The land is located next to an existing McDonald’s drive-through outlet, and access to it is via Persiaran Eco Cascadia. It is surrounded by mature neighbourhoods and various amenities. These include 11 education institutions, AEON Tebrau, IKEA Tebrau, Lotus Tebrau, Lotus Setia Tropika, AEON Dato’ Onn, etc.

• A new M-Series project in Johor. It will be called M Minori, and have a GDV of MYR469m. This will be Mah Sing’s first M-Series affordable high- rise housing project in Johor. The mixed development will comprise three blocks of serviced suites, with each unit have an indicative built-up area ranging from 550sqf to 880sqf. The indicative starting price will be from MYR260,000. The project will also feature some retail lots, with plans for some drive-through F&B outlets. Given the success of M-Series in the Klang Valley, we believe M Minori should see a similar response – given its good location and friendly price points.

• Earnings forecasts. We raise FY24F earnings marginally by 2%, as the project should start contributing to group numbers only in 2024. Mah Sing’s unbilled sales amounted to MYR2bn as at 1Q22.

• ESG. Given M Minori’s smaller GDV, our TP remains at MYR0.65. Our SOP valuation also builds in a 2% ESG premium – due to our ESG score of 3.10 for the company, based on our in-house proprietary methodology.

Source: RHB Research - 29 Jun 2022