Analysts are optimistic about the acquisition and the proposed M Cora mixed development.
PETALING JAYA: Mah Sing Group Bhd
’s RM51.8mil newly-acquired Penang land works out to about 9.8% of the project’s estimated gross development value (GDV), a level that sits comfortably within the group’s acceptable range.
Analysts are optimistic about the acquisition and the proposed M Cora mixed development, going by strong market response to the property developer’s recent launches in the state.
Mah Sing has formalised an agreement to acquire the 2.8-acre leasehold land near Karpal Singh Drive in Jelutong, Penang Island, for RM51.8mil or RM420 per sq ft from Penang Development Corp.
It planned to develop a mixed-use project, M Cora, on the site with a projected GDV of RM528mil.
BIMB Research said the land cost is within the company’s acceptable range and supports healthy margin prospects for future launches.
Mah Sing intended to fund the acquisition and development through a mix of internal funds and bank borrowings, with the final financing structure to be determined by management.
The research firm noted that as at Aug 28, the group held about RM1.12bil in cash and bank balances, while reported net gearing stood at 0.23 times as of the middle of this year.
“That robust balance sheet positions Mah Sing to pursue strategic acquisitions across Kuala Lumpur, Klang Valley, Johor and Penang and to capitalise on growth across multiple project types.
“Post-acquisition, remaining GDV and unbilled sales will increase to RM32.90bil, and the land bank will expand to 2,557 acres,” said BIMB Research, which kept its a “buy” call on the stock and raised its target price to RM1.89 (from RM1.87).
At press time, the stock traded at RM1.04, down 42% year-to-date.
To reflect the targeted project launches in the second half of 2026 (2H26), BIMB Research has raised the group’s financial years 2026-2027 earnings forecasts to 0.95% and 4.38% respectively,
Meanwhile, CIMB Securities said although the implied land-cost-to-GDV ratio for M Cora is attractive, it expected Mah Sing to incur additional backfilling costs to strengthen the site’s soil conditions.
As such, it projected M Cora to deliver earnings before interest and tax margins in line with the group’s typical range of 17% to 18% for its M Series developments. The payment terms for the land are also favourable as they will be staggered over three years.
M Cora is slated for launch in 2H26 with starting prices from RM426,000 per unit.
“For reference, Mah Sing unveiled its latest Penang development, M Zenni, in October, featuring freehold serviced residence units starting at RM480,000 per unit (RM698 per sq ft), which achieved a 70% take-up rate.
“In our view, comparable properties in the vicinity of the upcoming M Cora include The Lightz by Exsim Group (RM800 to RM900 per sq ft) and IJM Land Bhd’s 3 Residences @ Karpal Singh Drive (median: RM815 per sq ft).”
According to CIMB Research, M Cora is well positioned to replicate M Zenni’s success, supported by its competitive pricing, strategic location, and proximity to the Bandar Sri Penang station along the Mutiara Line light rail transit.
But for now, the research house made no changes to its earnings estimate for Mah Sing, pending the finalisation of M Cora’s pricing structure.
