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| People viewing Southville City@KL South model at Mah Sing’s sales gallery in Bangi. Mah Sing’s unbilled sales as at Dec 31, 2014 stood at RM5.26bil. |
PETALING JAYA: Mah Sing Group Bhd, which had chalked up sales totalling
RM3.43bil in its financial year ended Dec 31, 2014, has ongoing projects that
can sustain the company for at least another decade.
According to Hong Leong Investment Bank (HLIB) Research, the group has
projects with a gross development value (GDV) of almost RM60bil.
“Unbilled sales (as at Dec 31, 2014) stood at RM5.26bil, representing two
times the group’s 2014 property revenue.
“Coupled with the remaining GDV of RM59.8bil, the total RM65.1bil is
sufficient to sustain the group for the next eight to 10 years,” HLIB Research
said in a report.
The research house noted that new phases of launches for the current
financial year would be from properties in Southville City, M Residence 2,
Lakeville Residence, D’Sara Sentral, Feringghi Residence 2, Meridin
Bayvue@Sierra Perdana and Sutera Avenue.
“Mah Sing’s balance sheet continues to remain strong with net gearing at 0.36
times, allowing the group good land acquisition room of another RM300mil going
forward, before hitting the 0.5 times net gearing theoretical benchmark,” HLIB
Research added.
Mah Sing registered a net profit of RM84.55mil for its fourth quarter ended
Dec 31, 2014, a 20% increase from the RM70.70mil it had registered in the
previous corresponding period.
Revenue surged to RM843.95mil from RM570.21mil in the previous corresponding
period. Profit for the full year increased 21% to RM339.25mil from RM280.62mil
in the previous corresponding period, while revenue increased to RM2.90bil from
RM2.0bil a year earlier.
Analysts said the earnings were within expectations.
“Fourth-quarter net profit increased 20% year-on-year, driven by the
progressive recognition of profits from key projects in Petaling Jaya,
Cyberjaya, Ampang and Rawang,” noted CIMB Research in its report.
“Mah Sing remains an ‘add’ and one of our top picks, with strong earnings
growth, new sales and landbanking as potential re-rating catalysts,” it
said.
RHB Research also concurred that earnings were in line with expectations.
“Mah Sing clocked in RM980mil new sales in the fourth quarter of 2014,
bringing the full-year total to RM3.43bil. Although this was lower than
management’s target of RM3.6bil, the amount is among the highest in the
industry.
“We make minimal changes to our earnings forecasts,” it said.
Credit Suisse, which also said Mah Sing’s earnings were within expectations,
is maintaining an “outperform” call for the group.
“Mah Sing is our only outperform in the sector, as we believe its projects
are concentrated in the most resilient sectors – the Klang Valley and affordable
properties (less than RM1mil),” it added.
Meanwhile, Mah Sing announced that its rights issue exercise had received an
oversubscription for the rights issue with warrants, with an excess application
of 11.67%.
The rights shares with warrants are expected to be listed on the Main Market
of Bursa Malaysia on Feb 26.
The rights issue has raised about RM629mil, of which up to RM530mil will be
primarily used for land acquisition and property development activities, and the
balance for general working capital of the group as well as payment for expenses
in relation to the rights issue.
About RM370mil has been earmarked as part payment for the acquisition of land
in Puchong (Festival Lakecity) and Seremban, both parcels of which are being
prepared for preview this year, with expected revenue contributions to commence
from 2016.
AmResearch in its report said it was maintaining its “buy” call on Mah Sing
and has adjusted its fair value to RM3 per share (15% discount to the net asset
value) to account for its rights issue plus warrants.
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