MAHSING (8583) - Mah Sing Group - Rock steady
Target RM2.53 (Stock Rating: ADD)
Mah Sing's large group session at Invest Malaysia 2015 was a full house. Management touched on the macro outlook of the property sector as well as its various projects. We make no changes to our EPS forecasts, Add call or target basis of 10% discount to RNAV. Mah Sing remains one of our top picks for the sector, with its robust and consistent earnings growth, strong sales and active landbanking as potential re-rating catalysts.
What Happened
Mah Sing presented to a packed room in its large group session at Invest Malaysia today. The company was represented by Executive Director Dato' Steven Ng, CEO Mr. Ng Chai Yong and Senior GM Group, Corporate Finance Ms. Khaw Bee Nee. Dato' Steven Ng gave a comprehensive presentation of the group's operations and numerous projects as well as the outlook of the property sector. Dato' Steven believes that if not for the property speculation cooling measures, residential property prices could have been 30% higher and therefore prices are unlikely to fall despite the lacklustre property market conditions. He believes that it could take 9-12 months from the implementation of GST in 1 Apr for demand to return. Mr. Ng was particularly optimistic about the group’s upcoming Puchong project, which it hopes to launch in 4Q. It plans to launch residential apartments at around the RM600 psf level, which would keep absolute costs around RM500k per unit.
What We Think
There were no major surprises from the briefing except for management’s bullishness on residential property prices. The group is aiming to at least match its 2014 new sales of RM3.43bn, which was a record for the group and the highest Malaysian property sales for any developer in the country for the year. We believe this figure is achievable as it does not include potential sales from the Puchong project. At RM500k per unit, the apartments would be in the sweet spot of affordability and response should be strong given the strategic location in Puchong.
What You Should Do
Investors should continue to accumulate positions in Mah Sing. The group has one of the best and most consistent track records in pushing out sales and even matching last year's sales would be a commendable performance given that most of its competitors expect weaker sales in 2015 due to difficult property market conditions.
Source: CIMB Daybreak - 24 April 2015
Target RM2.53 (Stock Rating: ADD)
Mah Sing's large group session at Invest Malaysia 2015 was a full house. Management touched on the macro outlook of the property sector as well as its various projects. We make no changes to our EPS forecasts, Add call or target basis of 10% discount to RNAV. Mah Sing remains one of our top picks for the sector, with its robust and consistent earnings growth, strong sales and active landbanking as potential re-rating catalysts.
What Happened
Mah Sing presented to a packed room in its large group session at Invest Malaysia today. The company was represented by Executive Director Dato' Steven Ng, CEO Mr. Ng Chai Yong and Senior GM Group, Corporate Finance Ms. Khaw Bee Nee. Dato' Steven Ng gave a comprehensive presentation of the group's operations and numerous projects as well as the outlook of the property sector. Dato' Steven believes that if not for the property speculation cooling measures, residential property prices could have been 30% higher and therefore prices are unlikely to fall despite the lacklustre property market conditions. He believes that it could take 9-12 months from the implementation of GST in 1 Apr for demand to return. Mr. Ng was particularly optimistic about the group’s upcoming Puchong project, which it hopes to launch in 4Q. It plans to launch residential apartments at around the RM600 psf level, which would keep absolute costs around RM500k per unit.
What We Think
There were no major surprises from the briefing except for management’s bullishness on residential property prices. The group is aiming to at least match its 2014 new sales of RM3.43bn, which was a record for the group and the highest Malaysian property sales for any developer in the country for the year. We believe this figure is achievable as it does not include potential sales from the Puchong project. At RM500k per unit, the apartments would be in the sweet spot of affordability and response should be strong given the strategic location in Puchong.
What You Should Do
Investors should continue to accumulate positions in Mah Sing. The group has one of the best and most consistent track records in pushing out sales and even matching last year's sales would be a commendable performance given that most of its competitors expect weaker sales in 2015 due to difficult property market conditions.
Source: CIMB Daybreak - 24 April 2015
