KUALA LUMPUR: Mah Sing Group Bhd
's guidance-beating sales performance in FY23 is being followed up with an even higher sales target for FY24, which CGS International (CGSI) Research says is achievable.
In FY23, the property developer registered property sales of RM2.26bil, a 7.6% year-on-year increase, topping its guidance of RM2.2bil.
The group's new target for FY24 is RM2.5bil, in line with CGSI's forecast, and will be supported by planned launches worth RM2.8bil in gross development value (GDV) over the course of the year.
Mah Sing's management has guided that about 70% of the planned launches will be under its affordable M Series range, as compared to 75% in FY23.
In terms of location, 60% of the planned launches will be in the Klang Valley, and the balance 40% in Johor.
"We believe its FY24F minimum sales target is achievable given M Series’ affordability.
"In FY23, the M-Series achieved take-up rates of 90-100%, and we expect the encouraging momentum to sustain in FY24F," said CGSI in a company note.
The research firm is also positive over Mah Sing's net gearing, which reached a record low of 0.08x as at end-2023, which points towards a strong operating cash flow.
This comes despite the group's land-banking activities, including the acquisition of five tracts of land measuring a total of 593 acres for RM713mil in January 2024, as well as another 185 acres of land in Sepang for its business park industrial development.
"We are positive with its land-banking initiatives as its land acquisitions to-date have been at attractive valuations, with land cost-to-GDV ratio of 8-17%, which we believe is below the industry’s normal 20% threshold.
"Moreover, its M Series is designed to have a fast development turnaround," said CGSI.
The research firm raised its FY24/FY25 core net profit estimate on Mah Sing by 6.9%/12.2% as it expects higher progress billings over the two financial years, on the back of high unbilled sales of RM2.3bil as at end-FY23 and easing shortage of labour supply.
CGSI affirmed its call to accumulate Mah Sing stock and raised its target price to RM1.16.
