AmBank Research says Mah Sing has secured new sales of RM1.7bil (up 32%), attaining 85% of its 2022 sales target of RM2bil and this was the highest quarterly sales recorded since 2017.
PETALING JAYA: Mah Sing Group Bhd
is on track to achieve its 2022 sales target, which will be supported by new launches worth RM400mil in the fourth quarter coupled with its strong bookings of RM726mil, according to AmInvestment Bank Research (AmBank Research)
The research house said year-to-date, Mah Sing has secured new sales of RM1.7bil (32% increase), attaining 85% of its 2022 sales target of RM2bil and this was the highest quarterly sales recorded since 2017.
AmBank Research pointed out that as of the third quarter, the group’s unbilled sales expanded 12% year-on-year and 6% quarter-on-quarter to RM2.3bil, which represented a cover ratio of 1.4 times of 2023 estimated property development revenue.
Also, Mah Sing’s net gearing ratio improved to 0.27 times in the third quarter, from 0.34 times in the second quarter.
“This provides sufficient room to gear up for future value-accretive land acquisitions of up to RM800mil. We anticipate Mah Sing will embark on land-banking activities in Greater Kuala Lumpur in the coming quarters,” said the research house.
AmBank Research noted that Mah Sing’s stock currently trades at a bargain 2023 estimated price-to-earnings ratio of only seven times versus a four-year average of 11 times and offers an attractive dividend yield of 6%.
“We believe the mid-to-long-term outlook for Mah Sing remains positive backed by its savvy execution and quick turnaround business model; efforts in digital marketing and strength in offering affordable properties at strategic locations; and healthy 2022 estimated gearing of 0.31 times and improving financial cost with 65% of borrowings in fixed rate which will not be adversely impacted by higher interest rates,” it said.
AmInvestment Bank Research maintained its “buy” call on Mah Sing with an unchanged sum-of-the-parts-based fair value of 86 sen per share.
Meanwhile, RHB Research said Mah Sing’s third quarter financial results were within expectations, and its progress billings did not seem to be affected by the industry-wide labour shortage issue.
