AmInvestment positive on Mah Sing land acquisition

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KUALA LUMPUR: Mah Sing Group Bhd’s acquisition of 6.938 acres of freehold land in Tebrau, Johor Baru, for RM39.29mil will assist maintain its property earnings over the medium time period, in keeping with AmInvestment Bank Research.

“Overall, we are positive on the acquisition as it will help sustain Mah Sing’s property earnings over the medium term,” AmInvestment mentioned.

The analysis home mentioned the acquisition value of RM39.3mil (RM130 psf) implied a cost-to-GDV (gross growth worth) ratio of 8.4%, which is decrease than its common land cost-to-GDV ratio of 12%–15% for its total tasks.

“While there were not many identical transactions within the area recently, the asking price for commercial lands surrounding the neighbourhood with similar land size (5.2 to 6.5 acres) ranges from RM120 psf to RM150 psf. Hence, we deem the acquisition price as fair,” AmInvestment mentioned.

Mah Sing has proposed to develop a blended venture that can have an estimated GDV of about RM469mil.

The proposed blended venture, M Minori, will comprise three blocks of serviced suites with 1-bedroom, 2-bedroom and 3-bedroom models, with indicative build-outs starting from 550 sq ft to 880 sq ft, with indicative costs ranging from RM260,000.

“While maintaining our FY22F numbers, we raise FY23F–24F core net profit by 3%–6% to factor in the earnings contribution from the new project, M Minori.

“We maintain ‘buy’ on Mah Sing with a higher SOP-based fair value of RM0.87/share from RM0.85/share, which incorporates a neutral 3-star ESG rating,” AmInvestment mentioned.



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