KUALA LUMPUR (July 4): Analysts remain upbeat on Mah Sing Group Bhd (KL:MAHSING) after it acquired a piece of land in Taman Desa, which is earmarked for an RM1 billion high-rise residential project.
Kenanga Research, in a note on Thursday, said Mah Sing paid a fair price for the tract of land, given the recent transaction of RM400 to RM450 per square feet (sf) in the vicinity. It has a “market perform” call on the stock, with a target price of RM1.88.
“In terms of its indicative starting price at RM448,000 for an apartment sized 708sf (RM633 per sf) for a residential apartment, we see reasonable pricing points when compared with the listed asking prices of approximately RM480,000-RM550,000 for residential apartments within the vicinity, as seen on property online portals.
“Overall, we are slightly positive, as the intended development is fairly priced within a highly sought-after address in a mature area, allowing for quick monetisation,” it said.
Meanwhile, MIDF Research is positive on Mah Sing’s recent diversification into data centres, which will provide recurring income in the long-term.
The house maintained a “buy” recommendation on Mah Sing, raising its target price (TP) to RM1.97 (previously RM1.94).
“Our TP is based on [an] unchanged 15% discount to realisable net added value (RNAV)” MIDF said.
MIDF added that the Taman Desa land acquisition is expected to be completed in the first half of calendar year 2025 (1HCY2025) and is aligned with the property development company’s strategy to build affordable M-series projects.
Mah Sing intends to fund the acquisition through a combination of internally generated funds and bank borrowings, it said in the note.
Thus, at a low gearing net of 0.06 times in the first quarter of financial year 2024 (1QFY2024) and which is expected to reach up to 0.09 times, the research house opines that the low net will allow the company to continue its aggressive land-banking exercise.
At the time of writing, Mah Sing shares gained two sen or 1.1% at RM1.83 on Thursday, valuing the group at RM4.69 billion.