KEY INVESTMENT HIGHLIGHTS

• Land acquisition in Sentul
• Growing presence in Sentul
• Limited impact on balance sheet
• Earnings forecast maintained
• Maintain BUY with a revised TP of RM2.09 from RM2.08

Land acquisition in Sentul. Mah Sing Group (Mah Sing) announced that Klassik Tropika Development Sdn Bhd, a wholly-owned owned subsidiary of Mah Sing had entered into Sale and Purchase Agreement with vendors for the proposed acquisition of 2.78 acres of land in Sentul for purchase consideration of RM32m. The land acquisition is expected to complete in 2HCY25.

Growing presence in Sentul. The land acquisition is expected to be positive to Mah Sing as it will strengthen its presence in Sentul. The project on the land, to be named M Aria, is Mah Sing's third projects in Sentul which is a mature area in Klang Valley. Note that the previous two projects of Mah Sing in Sentul are M Centure and M Arisa which are fully sold. Meanwhile, M Aria which is M series projects of Mah Sing has estimated GDV of RM283m, is planned for apartments with affordable selling price starts from RM498k. Registration of interest is expected to be in 2H2025, in line with its quick-turnaround strategy. Besides, land cost to GDV ratio is attractive at 11%.

Limited impact on balance sheet. Mah Sing intends to fund the land acquisition via a combination of internally generated funds and bank borrowings. We estimate limited impact on balance sheet as net gearing is expected to increase marginally to 0.23x from 0.22x in 3QFY24.

Maintain BUY with a revised TP of RM2.09. We make no changes to our earnings forecast for FY24F/25F/26F. We revise our TP for Mah Sing to RM2.09 from RM2.08 as we include RNAV contribution from M Aria.

Our TP is based on unchanged 13% discount to RNAV. We remain positive on Mah Sing as its active land bank acquisition will drive new sales growth going forward. We are also positive on its quick turnaround strategy which will improve its balance sheet. Hence, we maintain our BUY call on Mah Sing.

Source: MIDF Research - 22 Jan 2025