Mah Sing may repeat 2013 sales this year

KUALA LUMPUR: Mah Sing Group Bhd, which met its internal target of RM3 billion new sales in 2013, is expected to at least maintain the same amount of sales this year, said RHB Research Institute Sdn Bhd analyst Loong Kok Wen.

She said Mah Sing’s sales for the financial year ended Dec 31, 2013 (FY13) met the management and RHB Research’s RM3 billion target.

“While the group did not indicate its official FY14 sales target, we expect the same amount to be repeated. Four months after the announcement of Budget 2014, we believe the current valuations (of the property sector) have largely priced in the negative impact of the cooling measures,” she said in a report last Friday.

Loong upgraded Mah Sing to a “buy” from “neutral” at RM2.06, with an unchanged fair value of RM2.44 fair value, as she believes that the property sector’s valuations have largely priced in the negatives, and that market sentiment and property demand should gradually recover from the sluggish fourth quarter (4QFY13) to 1QFY14 period.

In a statement last Friday, Mah Sing said its unbilled sales stood at RM4.4 billion as at Dec 31, 2013, representing 2.6 times the revenue recognised from its property division last year. This will ensure near term revenue visibility and steady streams of cash flow and liquidity.

“Despite expanded operations, our balance sheet remained strong with high cash pile at RM822.3 million and low net gearing at 0.16 times as at Dec 31, 2013, comfortably below the management’s optimal net gearing target of 0.5 times.

“The group is in a strong position to continue its expansion drive via landbanking exercises and development activities,” Mah Sing said.

It saw its net profit jump 28% to RM70.7 million for 4QFY13 from RM55.4 million a year ago, driven by its property development division.

Revenue for 4QFY13 rose 29% to RM570.21 million from RM441.44 million a year ago.

For full FY13, the group’s net profit grew 22% to RM280.62 million from RM230.2 million in FY12, while revenue advanced 13% to RM2 billion from RM1.78 billion.

Key projects that contributed to its earnings include M City and M Suites in Kuala Lumpur, Icon City in Petaling Jaya and Meridin @ Medini and Mah Sing i-Parc @ Tanjung Pelepas in Johor.

Mah Sing also proposed a first and final dividend of eight sen per share for FY13, slightly higher than the 7.6 sen paid in FY12. This is subject to approval by its shareholders at the forthcoming annual general meeting.

Going forward, Mah Sing said 87% of the target residential launches for 2014 will comprise mainly mass to mid-segment products priced RM1 million and below.

“The group expects property buying interests to be especially strong in the second half of the year ahead of the goods and services tax implementation next year, supported by accommodative interest rate environment and healthy employment market.

“The solid foundation built over the years ensured that the group remains flexible and responsive to market development and policies,” it added.


This article first appeared in The Edge Financial Daily, on March 03, 2014.


Looking for properties to buy or rent? With >150,000 exclusive listings, including undervalued properties, from vetted Pro Agents, you can now easily find the right property on Malaysia's leading property portal EdgeProp! You can also get free past transacted data and use our proprietary Edge Reference Price tool, to make an informed purchase.