Kenanga Research believes Mah Sing is on track to surpass its 2024 sales target of RM2.5bil compared with RM2.2bil in 2023.
PETALING JAYA: Kenanga Research is positive about the near-term prospects of Mah Sing Group Bhd
following an overwhelming response to the recent launches of housing projects in Bangi and Sepang in Selangor.
Kenanga Research said following a recent meeting with the company’s management, some of the key highlights include the successful launch of the RM500mil M Zenya mixed-use development in Kepong, which saw a take-up rate of 92% after its launch earlier this month.
“This stretches its winning streak of achieving a take-up rate of more than 90% within a year of launch. The new success follows similar rates for the RM519mil M Minori project launched in October 2023, and the RM790mil M Nova launched in August 2023,” Kenanga Research noted.
With the latest success, the research house believes Mah Sing is on track to surpass its 2024 sales target of RM2.5bil compared with RM2.2bil in 2023.
Another key highlight is Mah Sing’s strong war chest for land acquisition.
“The group is still on the lookout for more land. This follows a slew of acquisitions in the Klang Valley and Johor, recently. Funding is not an issue given its strong balance sheet with net gearing of only 0.08 times as of end-2023,” Kenanga Research said.
Mah Sing, which also expanded its plastic-pallet operation to Jakarta in the first quarter of this year, also intends to expand further within South-East Asia, with Thailand and the Philippines specifically as the next targets.
“The key drivers of the business are the booming regional eCommerce markets and the preference for the durability of plastic pallets over wooden ones. It has plans to spin off this business within the next three years,” added the research house.
Kenanga Research has raised its FY24-FY25 net profit forecasts by 8% and 9%, respectively.
It also lifted Mah Sing’s target price by 44% to RM1.60 from RM1.11 previously.
“We like Mah Sing for its lifestyle-focused products providing ease of entry for first-time home buyers, its efficient and highly regarded land bank management and fast turnaround time, which minimises carrying costs, and its low net gearing of only 0.08 times as of end-2023.
“The low gearing enables the group to gear up significantly to acquire new land as and when opportunities arise,” the research house noted.
