Kenanga Research keeps Buy on Mah Sing at RM1.80

KUALA LUMPUR: Kenanga Research is keeping its Buy call on Mah Sing Group at RM1.80 with a target price of RM2.10 after exercising its option to buy a piece of land in Cyberjaya.

Mah Sing intends to exercise its option to purchase 6.32 acres of freehold commercial land, adjacent to Garden Residence, Cyberjaya.

The site faces the Lim Kok Wing University and is a stone's throw away from the ERL KLIA Transit service. Setia Haruman Sdn Bhd is the vendor of the Garden Residence land. The purchase consideration is RM21.7m or RM79psf.

"We believe the pricing is fair since recent transactions for commercial land in Cyberjaya are between RM80psf-RM90psf," it said.

Reiterate BUY with unchanged fair value of RM2.10 (RM1.75 ex-bonus), based on FD SoP RNAV, as we value iParc 2 land at purchase price.

At current prices, 12 times FY10E PER is attractive vs. historical 14x. Dividend yield of moe than 4% is attractive vs. peer’s 2%-3%.

Near term catalysts lies with improved liquidity from bonus issue/placements, finalization of its Changzhou, China project and more landbanking.