“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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