Mah Sing Group Bhd (MAHSING: 8583) holds a total remaining gross development value (GDV) of RM28.5bn across 2,412 acres of landbank, with an average selling price of below RM500,000 per unit. The company has also demonstrated its commitment to innovation and growth by making significant advancements in the data centre (DC) industry. Based on our estimates, the data centre business is projected to contribute more than RM80m in EBITDA for MAHSING in FY26. BUY with a target price of RM2.43, based on Sum of Parts (SOP) valuations.

In 2024, MAHSING made significant steps by acquiring over 60 acres of prime land across Klang Valley and Johor, paving the way for projects including (i) M Aspira, Taman Desa; (ii) M Aurora, Old Klang Road; (iii) MSS Business Park, Sepang; (iv) M Tiara 2; (v) M Tiara 3; and (vi) M Grand Minori. These initiatives are expected to yield a gross development value (GDV) of approximately RM5.8bn, with land acquisition costs comprising 7%–17% of the GDV.

The company launched 4 projects in 2024, all located in Klang Valley. These high-rise residential developments include (i) M-Zenya, Kepong (GDV: RM607m); (ii) M Azura, Setapak (GDV: RM613m); (iii) M Vertica, Cheras (GDV: RM150m); and (iv) M Aspira, Taman Desa (GDV: RM1bn). These projects are expected to be well received due to their proximity to the KL City Centre.

MAHSING forged key partnerships with Bridge Data Centres (BDC) to drive the development of state-of-the-art data centre facilities. The Mah Sing DC Hub@Southville City, Bangi currently holds 300 MW of secured power capacity, with an additional 200 MW earmarked for future collaborations, solidifying its role as a major regional data centre hub.

Furthermore, MAHSING has 42 acres of land at its Meridin East township in Johor Bahru, capable of supporting 300 MW of future power capacity, offering significant opportunities for further growth and value creation. As part of this collaboration, BDC will provide a forfeitable deposit while both companies work towards finalising the Joint Venture Agreement (JVA). This includes forming a joint venture company, defining share ratios, and executing the Sale and Purchase Agreement (SPA) for the land.

MAHSING is confident in achieving its 2024 sales target of RM2.5bn, with RM1.85bn already achieved by September 2024. The sales target for FY25 will be announced at a later date. We expect MAHSING to register net earnings of RM286.2m and RM313.4m for FY25 and FY26, respectively, underpinned by strong unbilled sales of RM2.76bn (as of September 2024) and higher revenue recognition from the completion of several ongoing projects. The company’s financial leverage remains healthy, with a net gearing ratio of 0.22x as of the same period.

Source: Rakuten Research - 9 Jan 2025

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