CIMB Research maintains Add on Mah Sing, lowers target to RM2.49

KUALA LUMPUR (Jan 23): CIMB Research has maintained its Add rating on Mah Sing Group Bhd at RM2.06 with a lower target price of RM2.49 (from RM2.63) and said Mah Sing's share price went ex on Jan 22 for the 3-for-10 rights issue and the 3-free-warrants-for-10-rights shares.

In a note Jan 22, the research house said the 1-for-4 bonus issue was expected to go ex later in 3Q.

It said proceeds from the rights issue amount to about RM630 million; RM530 million will be used for land and property development, RM92 million for working capital and RM8 million for proposal-related expenses.

“We cut our EPS and RNAV for the rights with free warrants but keep our Add call and target basis of 10% discount to RNAV.

“The lower RNAV also dilutes our target price. Mah Sing remains one of our top sector picks and the rights issue will allow the group to continue with its aggressive landbanking.

“Potential re-rating catalysts include robust earnings growth, strong sales and further landbanking,” it said.