KUALA LUMPUR (Jan 22): Mah Sing Group Bhd’s (KL:MAHSING) proposed acquisition of land in Sentul, its first deal of the year, is being done at fair and attractive valuations, analysts said.

The purchase price is about 11% of potential gross development value (GDV) of RM283 million, which is below the “standard 20% rule”, TA Securities said in a note. The location is also prime, allowing the company to tap into robust demand for affordable homes, the research house said.

“Overall, we are optimistic about this acquisition, given its strategic location and reasonable acquisition price,” TA Securities said.

On Tuesday (Jan 21), Mah Sing announced that it is purchasing a 2.78-acre land in Sentul for RM32 million, to be developed into residences. The project, its third in Sentul, calls for apartments measuring 800 square-feet and 950 square-feet, indicatively priced from RM498,000.

The proposed acquisition is expected to be closed by the second half of 2025 and upon completion, Mah Sing’s landbank will expand to over 2,400 acres, with a GDV of nearly RM29 billion.

“We are optimistic about the deal, following a strong market response to the company’s previous project launches in Sentul — M Centura and M Arisa,” said BIMB Securities. The project is also well positioned to tap into a large captive market in the area, it said.

Given its strong balance sheet with RM747.4 million in cash and bank balances, alongside a low net gearing of 0.22x, the company is not expected to run into trouble funding the acquisition, the research house said.

Analysts are mostly bullish on the stock, with 12 “buy” calls out of 13; only CGS International has the stock on a “hold” call. The average target price of RM2.14, according to Bloomberg, implies a potential return of 36% in the next 12 months, from its last price.

The stock was up 4% to RM1.55 on Wednesday, giving the company a market capitalisation of close to RM4 billion.

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Mah Sing buys RM32 mil land for third project in Sentul