• Mah Sing Group (Mahsing), through its wholly owned subsidiaryMajor Land Development Sdn Bhd (MLDSB), has entered into aconditional sale and purchase agreement (SPA) with Pink ForestSdn Bhd (PFSB) for a proposed acquisition of a freehold landspanning 5.24 acres in Mukim Petaling, Daerah Kuala Lumpur, fora total purchase consideration of RM112.97mn.

• The proposed development will feature M Aurora, a key TransitOriented Development (TOD), and is anticipated to have a gross development value (GDV) of RM660mn.

• We are optimistic on the deal, fueled by strong demand for MSeries apartments in the city center. The M Aurora launch will enhance the company's market position, boosting growth and earnings, increasing Mah Sing's remaining GDV to RM26.77bn and expanding its land bank to 2,392 acres.

• We maintain a BUY call on Mah Sing, with an SOP-derived TP of RM2.19. We continue to like Mah Sing given its strong fundamentals and active ongoing land acquisitions, which would provide sustainable long-term earnings visibility.

M-Series Expansion Products

Mah Sing Group (Mahsing), through its wholly owned subsidiary Major Land Development Sdn Bhd (MLDSB), has entered into a conditional sale and purchase agreement (SPA) with Pink Forest Sdn Bhd (PFSB) for a proposed acquisition of a freehold land spanning 5.24 acres in Mukim Petaling, Daerah Kuala Lumpur, for a total purchase consideration of RM112.97mn. The proposed development will feature M Aurora, a Transit-Oriented Development (TOD) with an estimated GDV of RM660mn. It is strategically positioned, served by an extensive network of trunk roads and highways, with the KTM Jalan Templer Station just 330 meters away and the KTM Petaling Station 450 meters away. M Aurora will consist of serviced apartments and retail spaces, including two drive-through units, designed to cater to working adults, young families, and buyers seeking upgrades. The serviced apartments will offer a range of layouts, including two, three, or four-bedroom options, with sizes ranging from 702 sqft to 1,005 sqft and starting prices from RM468,800. In addition to its residential and retail offerings, M Aurora will integrate several green features to promote sustainability and enhance the overall living environment.

Fair Price Acquisition

The purchase price is within the acceptable land cost range, making up 17% of the estimated GDV. The company plans to fund the acquisition and development costs through a mix of internal funds and bank borrowings, with the final financing structure determined by management later.

As of 30 June 2024, Mah Sing has a strong financial position with approximately RM911.5mn in cash and bank balances, alongside a low net gearing of 0.10x. This robust balance sheet enables the company to confidently pursue further strategic acquisitions across key regions, including Kuala Lumpur, Klang Valley, Johor, and Penang, and to capitalize on growth opportunities across various project types.

Maintain BUY with a TP of RM2.19

We maintain our BUY recommendation on Mah Sing, with an SOP-derived TP of RM2.19. We continue to like Mah Sing given: 1) the company's strong fundamentals and ongoing land acquisitions, which facilitate a quick turnaround and enhance visibility for sustainable long-term earnings, and 2) the diversification of revenue streams through the leveraging of its land bank to generate recurring income from data centers.

Source: BIMB Securities Research - 8 Nov 2024