PETALING JAYA: Strong demand for affordable homes and reduced operating cost at its gloves venture should support Mah Sing Group Bhd
’s growth in the coming year.
Note that Mah Sing is targeting new sales of RM2bil in 2022, underpinned by new launches worth RM2.4bil, and about 60% of the group’s residential sales is targeted at RM500,000 and below per unit.
Given that demand for affordable homes in the urban areas remains healthy, analysts have kept a positive view on the property developer. Besides, Mah Sing has secured about RM800mil in bookings in the first two months of 2022 alone.
“We believe Mah Sing’s products will continue to gain traction from buyers mainly due to their strategic locations with large captive market, affordable price points and well-designed features that are aligned with current market demand,” said Hong Leong Investment Bank Research (HLIB Research) in a report.
Mah Sing’s new property sales for the financial year ended Dec 31, 2021 (FY21) came in at RM1.6bil versus RM1.1bil in FY20, supported by the success of its M-Series of affordably-priced projects as well as the effectiveness of its digital marketing initiatives.
The group saw a rebound in earnings in the last quarter of FY21 with net profit coming in 49% higher year-on-year at RM40.01mil. That brought cumulative net profit in FY21 to RM160.86mil, a year-on-year increase of 70.5%.
HLIB said its FY21 earnings came in below expectations largely due to pre-operating losses from the gloves segment.
Recall that Mah Sing had successfully commenced all 12 of its glove production lines in December 2021. However, the sales volume achieved in FY21 was insignificant due to delays in commissioning of the production lines and operation restrictions due to the nationwide lockdown.
“As the group has recently obtained the required certifications for medical-grade glove sales to the United States, Canada, the European Union and the European Economic Area, management believes that increased sales volume will help reduce per-unit operating expenses and overheads in the future.
“Nonetheless, given the low average selling price (ASP) and soft demand outlook for gloves, we anticipate Mah Sing’s glove manufacturing sector will continue to operate at a loss this year,” said TA Securities Research.
CGS-CIMB Research, on the other hand, expects a meaningful contribution from its gloves division to start in the second half of 2022.
Most research houses have kept their “buy” recommendations on the stock but with lower earnings forecasts in view of the delay in gloves commissioning as well as normalised gloves ASP, moving forward.
HLIB Research has a target price of RM0.87 while TA Securities and CGS-CIMB have pegged a target price of RM0.83 and RM0.75, respectively, on the stock.
’s growth in the coming year.Note that Mah Sing is targeting new sales of RM2bil in 2022, underpinned by new launches worth RM2.4bil, and about 60% of the group’s residential sales is targeted at RM500,000 and below per unit.
Given that demand for affordable homes in the urban areas remains healthy, analysts have kept a positive view on the property developer. Besides, Mah Sing has secured about RM800mil in bookings in the first two months of 2022 alone.
“We believe Mah Sing’s products will continue to gain traction from buyers mainly due to their strategic locations with large captive market, affordable price points and well-designed features that are aligned with current market demand,” said Hong Leong Investment Bank Research (HLIB Research) in a report.
Mah Sing’s new property sales for the financial year ended Dec 31, 2021 (FY21) came in at RM1.6bil versus RM1.1bil in FY20, supported by the success of its M-Series of affordably-priced projects as well as the effectiveness of its digital marketing initiatives.
The group saw a rebound in earnings in the last quarter of FY21 with net profit coming in 49% higher year-on-year at RM40.01mil. That brought cumulative net profit in FY21 to RM160.86mil, a year-on-year increase of 70.5%.
HLIB said its FY21 earnings came in below expectations largely due to pre-operating losses from the gloves segment.
Recall that Mah Sing had successfully commenced all 12 of its glove production lines in December 2021. However, the sales volume achieved in FY21 was insignificant due to delays in commissioning of the production lines and operation restrictions due to the nationwide lockdown.
“As the group has recently obtained the required certifications for medical-grade glove sales to the United States, Canada, the European Union and the European Economic Area, management believes that increased sales volume will help reduce per-unit operating expenses and overheads in the future.
“Nonetheless, given the low average selling price (ASP) and soft demand outlook for gloves, we anticipate Mah Sing’s glove manufacturing sector will continue to operate at a loss this year,” said TA Securities Research.
CGS-CIMB Research, on the other hand, expects a meaningful contribution from its gloves division to start in the second half of 2022.
Most research houses have kept their “buy” recommendations on the stock but with lower earnings forecasts in view of the delay in gloves commissioning as well as normalised gloves ASP, moving forward.
HLIB Research has a target price of RM0.87 while TA Securities and CGS-CIMB have pegged a target price of RM0.83 and RM0.75, respectively, on the stock.
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