• On 3rd Dec 2024, Mah Sing Group (Mahsing), through its wholly owned subsidiary Loyal Sierra Development Sdn Bhd (LSDSB), has entered into a conditional sale and purchase agreement (SPA) with several vendors (Vendors) for a proposed acquisition of a freehold prime lands in Tempat Batu 18, Jalan Pontian, Pulai, Johor. totaling approximately 59.12 acres, for a total purchase consideration of RM63mn.

• The proposed development will feature M Tiara 3, a township with spacious super-linked homes, and is anticipated to have a gross development value (GDV) of RM463mn.

• We are optimistic about the deal, fueled by strong spillover demand from M Tiara, which garnered over 14,000 registrations of interest and offers a prime opportunity for Mahsing to expand its footprint in the region. With this third land acquisition in Pulai, this will increase Mah Sing's remaining GDV to RM27.04bn and expand its land bank to 2,406 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.

Third M-Series Development in Pulai

Mah Sing Group (Mahsing), through its wholly owned subsidiary Loyal Sierra Development Sdn Bhd (LSDSB), has entered into a conditional SPA with Hau Enterprise Sdn Bhd (HESB), Chia Kim Heng, Chia Teck Heng, Low You Chone, and Wong Moi Yong (the Vendors). This proposed acquisition involves freehold prime land located at Tempat Batu 18, Jalan Pontian, Mukim Pulai, Daerah Johor Bahru, Negeri Johor Darul Takzim, totaling approximately 59.12 acres, for a total purchase consideration of RM63mn. Subject to authorities' approval and based on preliminary plans, the land will be developed into a township, named M Tiara 3, featuring spacious super-linked homes with indicative built-up sizes of 22x70, 24x70, and 28x60, and an indicative starting price of RM780,000. The land acquisition for M Tiara 3 marks the 5th land purchase this year and the 3rd in Pulai, following the purchase of 100.4 acres in Apr 2024 for M Tiara 2 and 75.7 acres in June 2023 for M Tiara. This acquisition presents a prime opportunity for regional expansion, capitalizing on the spillover demand from the successful M Tiara project, which recorded over 14,000 registrations and a 100% take-up rate for international lots. Market growth is further supported by projects such as the Johor-Singapore RTS and Special Economic Zone.

Fair Price Acquisition

The purchase price is within the acceptable land cost range, making up 13.6% 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 September 2024, Mah Sing has a strong financial position with approximately RM747.4mn in cash and bank balances, alongside a low net gearing of 0.22x. 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 centres.

Source: BIMB Securities Research - 4 Dec 2024