Mah Sing (HLG Research) buy; target price RM2.48

New projects in Jalan Ampang and Cyberjaya


• MSGB announced the acquisition of two parcels of land yesterday
4.7 acres of freehold land was acquired along Jalan Ampang for RM115m or RM560 psf. MSGB will develop a SoHo project called M City Jalan Ampang with GDV of RM920m.
35 acres of freehold land was acquired in Cyberjaya, next to their Garden Residence project for RM52m or RM34psf. The land will become part of the Garden Residence project, taking the township’s acreage up to 150 acres. The land will be used for semi-d homes and will add RM280m of GDV to the overall project.

Financial impact

As both projects will are expected to be launched only in 2011, there is no impact for the current financial year.
The projects are expected to enhance earnings by 12-22% for the next two years.

Pros / Cons

We view the acquisitions favourably as land cost accounts for 13% and 19% of GDV for Ampang and Cyberjaya.
Acquisitions for this year now total RM3.1bn in GDV, bringing overall future GDV to RM8.6bn (inclusive of unbilled sales), and providing earnings visibility of 5-7 years.


Slower than expected sales (unlikely).
Execution risks for project management (unlikely).


No change to our BUY call as this development reaffirms our view that MSGB is an agile niche developer who are able to consistently replenish their landbank at reasonable prices.


We raise our RNAV and target price from RM2.28 to RM2.48 per share.

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