• Maintain BUY (TP: RM2.07). In 1HFY24, Mah Sing Group Berhad (Mah Sing)'s revenue declined by 12% YoY to RM1.1bn, due to higher proportion of initial-stage construction in new projects. However, 1HFY24 core net profit rose by 20% YoY to RM120.3mn driven by the finalization of construction costs for certain contracts that are close to completion. Overall, 1HFY24 core net profit was inline with both our and Bloomberg consensus’ expectations, accounting for 50% of full-year forecast. We maintain a BUY call on Mah Sing with a TP of RM2.07, based on a SOP valuation with a discount to the RNAV at 35% and included the data center (DC) value at 19x EV/EBITDA.

• Key Highlight. The company achieved RM1.66bn in new property sales in 8MFY24, marking a 66% of full year FY24 sales target. The impressive property sales performance was primarily driven by higher demand for Mah Sing's M series development among first-time home buyers. The unbilled sales position has grown to RM2.4bn, providing future revenue visibility.

• Earnings revision. No change to earnings.

• Outlook. We expect Mah Sing to maintain its positive earnings through the strong sales momentum of the M-Series projects. These upcoming projects include M Zenya in Kepong, M Azura in Setapak, M Terra in Puchong, M Sinar in Southville City, M Legasi in Semenyih, M Aspira in Taman Desa, and M Tiara in Johor Bahru. Mah Sing also plans to introduce additional phases in existing developments, such as M Nova in Kepong, M Minori, and Meridin East in Johor Bahru, further enhancing sales. Mahsing has strategically positioned itself in the affordable residential market with its popular M-Series, managing a substantial landbank of 2,387 acres with a remaining Gross Development Value (GDV) of RM26bn. As of June 30, 2024, the company maintains a robust balance sheet approximately RM912mn in cash and balance, and short-term investment funds. Additionally, it benefits from a low net gearing ratio of 0.10x, underscoring its strong financial health.

Source: BIMB Securities Research - 2 Sept 2024