KUALA LUMPUR (June 29): Research firms maintained their positive ratings of Mah Sing Group Bhd following the group’s announcement of the proposed acquisition of 2.8 hectares of freehold land in Johor for a mixed development property project known as M Minori.
Kenanga Research in a research note on Wednesday (June 29) maintained its financial year ending Dec 31, 2022 (FY22) and FY23 earnings estimates, backed by unchanged sales targets of RM1.7 billion.
"We maintain our 'market perform' call with an unchanged target price (TP) of 60 sen per share derived from a 65% discount to realisable net asset value," it said.
Meanwhile, MIDF Research expects a muted impact on the balance sheet as Mah Sing had a cash pile of RM1 billion in the first quarter of FY22.
"We maintain our 'buy' call on Mah Sing with an unchanged TP of 74 sen as we are positive on its earnings outlook, which is expected to be driven by the property development division.
"Besides, the new property sales outlook is also supported by its strategy of a quick turnaround," said the research firm.
AmInvestment Bank echoed the sentiment, citing that the acquisition would help sustain the company’s property earnings over the medium term.
"While maintaining our FY22 expectation numbers, we raise our FY23-24 core net profit forecasts by 3%-6% to factor in the earnings contribution from the M Minori project with a gross development value of RM469 million.
“We maintain 'buy' on Mah Sing with a higher sum-of-parts-based fair value of 87 sen per share from 85 sen previously, which incorporates a neutral three-star environmental, social and governance rating," it said.
As of noon break, Mah Sing's share price was flat at 59.5 sen, with 126,600 shares transacted.