KUALA LUMPUR: Mah Sing Group Bhd
’s acquisition of a 6.169 acres of land in Taman Desa, Kuala Lumpur for RM108mil is deemed a positive by analysts.
The developer said the land will be developed in two phases, with an estimated gross development value (GDV) of RM1.01bil.
“We are positive on the land acquisition as the land acquisition is in line with Mah Sing’s strategy of building affordable M-series projects within Klang Valley,” MIDF Research said in a report.
The research house noted that the land is strategically located in Taman Desa with access of multiple expressways and wide range of amenities such as Mid Valley Megamall and KL Eco City.
MIDF said the land cost to GDV ratio is attractive at 11%. Mah Sing targets to start registration of interest in 3QFY24, in line with its quick turnaround strategy.
“We estimate the net gearing of Mah Sing to go up to 0.09x from 0.06x in 1QFY24. We opine that the low net gearing of Mah Sing will allow the company to continue its aggressive land banking exercise,” it added.
MIDF has maintained a “buy” call on Mah Sing with a revised target price of RM1.97 from RM1.94.
Meanwhile, Kenanga Research believed the developer is paying a fair price for the land.
“At RM402 psf, we believe Mah Sing is paying a fair price considering asking prices of c.RM400-450 psf in the vicinity.”
Kenanga said the apartment's starting price of RM448,000 for 708 square feet (RM633 per square foot) is reasonable compared to the listed prices of RM480,000 to RM550,000 for similar units in the area on property websites.
“Overall, we are slightly positive as the intended development is fairly priced within a highly sought-after address in a mature area, allowing for quick monetisation,” it added.
Kenanga has raised its target price by 0.5% to RM1.88 from RM1.87, reflecting enhancement from the latest project. It has maintained a “market perform” on Mah Sing.
