• Maintain BUY (TP: RM2.19). Mah Sing Group Berhad (Mah Sing)'s 9MFY24 revenue declined by 8.1% YoY to RM1.78bn, due to the higher proportion of new sales secured from new projects, where the contribution to revenue is lower in the initial stages of construction progress. However, 9MFY24 core net profit rose by 20% YoY to RM180.3mn driven by the finalization of construction costs for certain contracts that are close to completion. Overall, 9MFY24 core net profit was inline with both our and Bloomberg consensus’ expectations, accounting for 75% of full-year forecast. We maintain a BUY call on Mah Sing with a TP of RM2.19, 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 RM1.85bn in new property sales in 9MFY24, marking a 74% 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 RM2.77bn, providing future revenue visibility.

• Earnings Revision. No change to earnings.

• Outlook. Mah Sing continues to demonstrate strong earnings potential, driven by the solid sales momentum of its M-Series projects. The company remains committed to expanding its landbank with a strategic focus on fast-turnaround opportunities. As part of this strategy, Mah Sing made its 4th land acquisition of the year, M Aurora in Old Klang Road, which has a potential Gross Development Value (GDV) of RM660mn. This acquisition brings the total cumulative GDV to RM5.12bn in 2024. Backed by a robust balance sheet and positive market reception to its M-Series developments, Mah Sing is focused on further expanding its presence in key regions, including the Klang Valley, Johor Bahru, and Penang. The company plans to grow both its residential and industrial portfolios. Strategically positioned in the affordable residential market, Mah Sing continues to manage a substantial landbank of 2,347 acres, with a remaining GDV of RM26bn.

Source: BIMB Securities Research - 2 Dec 2024