MAHSING (8583) - CIMB Research maintains Add on Mah Sing
KUALA LUMPUR: CIMB Research has maintained its Add call on Mah Sing with a target price of RM2.49 and remained as one of its top sector picks and the rights issue will allow the group to continue with its aggressive landbanking.
In a note on Friday, CIMB said Mah Sing's share price went ex today for the 3-for-10 rights issue and the 3-free-warrants-for-10-rights shares.
The 1-for-4 bonus issue is expected to go ex later in 3Q. Proceeds from the rights issue amount to RM630mil where RM530mil will be used for land and property development, RM92mil for working capital and RM8mil for proposal-related expenses.
"We are relatively neutral on the cash-raising exercise as the dilutive effect from the rights issue should be offset by stronger longer-term growth prospects due to the group’s sustainable aggressive landbanking efforts.
With the RM630mil proceeds, Mah Sing has leeway to gear up its balance sheet by another RM1bil while maintaining a net-debt-to-equity ratio of around 0.5 times.
This will help the group maintain its position as one of the leading developers in Malaysia. Also, the free warrants and upcoming bonus issues should act as sweeteners to shareholders, it said.
"Investors should continue accumulating Mah Sing shares.
"The group chalked up new sales of RM3.43bn in 2014, a 14% yoy increase. This is very commendable considering that most other developers suffered sales declines during the year as a result of dampened demand due to measures by the government to cool property speculation.
"For 2015, Mah Sing is targeting to achieve new sales of at least RM3.43bil but we will not be surprised if the group manages to register sales growth despite the challenging outlook on the back of the implementation of GST starting 1 Apr," it said.
CIMB also added that the timing of landbanking could also be good as landowners may be more reasonable in their asking price
http://www.thestar.com.my
KUALA LUMPUR: CIMB Research has maintained its Add call on Mah Sing with a target price of RM2.49 and remained as one of its top sector picks and the rights issue will allow the group to continue with its aggressive landbanking.
In a note on Friday, CIMB said Mah Sing's share price went ex today for the 3-for-10 rights issue and the 3-free-warrants-for-10-rights shares.
The 1-for-4 bonus issue is expected to go ex later in 3Q. Proceeds from the rights issue amount to RM630mil where RM530mil will be used for land and property development, RM92mil for working capital and RM8mil for proposal-related expenses.
"We are relatively neutral on the cash-raising exercise as the dilutive effect from the rights issue should be offset by stronger longer-term growth prospects due to the group’s sustainable aggressive landbanking efforts.
With the RM630mil proceeds, Mah Sing has leeway to gear up its balance sheet by another RM1bil while maintaining a net-debt-to-equity ratio of around 0.5 times.
This will help the group maintain its position as one of the leading developers in Malaysia. Also, the free warrants and upcoming bonus issues should act as sweeteners to shareholders, it said.
"Investors should continue accumulating Mah Sing shares.
"The group chalked up new sales of RM3.43bn in 2014, a 14% yoy increase. This is very commendable considering that most other developers suffered sales declines during the year as a result of dampened demand due to measures by the government to cool property speculation.
"For 2015, Mah Sing is targeting to achieve new sales of at least RM3.43bil but we will not be surprised if the group manages to register sales growth despite the challenging outlook on the back of the implementation of GST starting 1 Apr," it said.
CIMB also added that the timing of landbanking could also be good as landowners may be more reasonable in their asking price
http://www.thestar.com.my
