'Mah Sing targeting RM3b in new sales this year'

KUALA LUMPUR: Mah Sing Group Bhd is targeting new sales of more than RM3 billion this year, analysts who were recently briefed by its management said.

This is expected to be mainly derived from new projects and launches such as Feringghi Residence @Penang, M-Residence 2@Rawang, Southville City@Bangi, Mah Sing i-Pac@Johor and Meridin@Medini, they added.

TA Securities said the target is achievable, and it has maintained its new sales assumptions of RM3.1 billion for financial year 2013.

"We understand that the executive suites and three-bedroom units at Southville City@Bangi, which were affordably priced from RM208,000 per unit and RM280,000 per unit respectively, have already secured more than 8,000 registrants," the firm said in a recent report.

TA Securities noted that Mah Sing had recorded new sales of RM2.5 billion in FY12, representing a decent growth of 11 per cent.

The performance can be attribu-ted to maiden contribution from M Residence@Rawang, Southbay City@Penang and Sutera Avenue@Sabah, which have collec-tively contributed RM522 million to sales.

The launches of new phases at Kinrara Residence and Clover@Garden Residence also boosted sales.

The record sales have lifted Mah Sing's total unbilled sales to RM3.2 billion as at December 2012 from RM2.95 billion a quarter ago.

"The strong unbilled sales represent about two times the group's property revenue recorded in FY12.

"This provides more than one-year earnings visibility to the group," said TA Securities, which has maintained its "buy" tag on the stock with a target price of RM2.61.

Kenanga Research, meanwhile, noted that Mah Sing is at the final stages of negotiating land deals, although there is no clarity on acquisition size.

"Nevertheless, Mah Sing has been aggressively replenishing sizable land in the past five years and thus we expect the same trend to continue.

"As mentioned earlier, the group can bag about RM1.1 billion worth of land, based on a 70:30 debt-equity ratio, which implies potential new GDV (gross development value) of RM7.4 billion," it noted.

Kenanga Research also has reaffirmed its "market perform" on Mah Sing, in line with its "neutral" call on the property sector, with a target price of RM2.08.

AmResearch Sdn Bhd, which has kept its "buy" tag with RM3.60 target price, said Mah Sing's earnings are very much secured with strong unbilled sales of RM3.2 billion, which is double that of its FY12's property turnover.

Mah Sing is currently trading at a steep 54 per cent discount to its fully diluted revalued net asset value (FD NAV) estimate of RM4.80 per share, it noted.

"While we are optimistic Mah Sing would be able to achieve the ambitious FY13F sales target of RM3 billion on the back of this solid set of numbers, we, nonetheless, expect its share price to trade sideways due to weak sentiment for property counters amid election risks," it added.