No immediate earnings impact for Mah Sing

KUALA LUMPUR: Maybank Investment Bank Bhd maintained its earnings estimates for Mah Sing Group Bhd // following changes in the planned sale of the property developer's commercial tower within Kuala Lumpur prime land.

In a note today, Maybank analyst Ong Chee Ting said there was no immediate impact to Mah Sing's earnings because the construction // of the 20-storey grade A building known as East Wing of The Icon @ Tun Razak along Jalan Tun Razak was completed in September, and Mah Sing had found a new buyer after terminating the transaction with the original purchaser.

"We do not anticipate any adjustments to quarterly earnings in the fourth quarter of financial year 2009 (FY09) as the construction of the building was completed in September 2009 and Mah Sing has managed to re-sell the building in 2009," said Ong who also retained his Buy call and RM2.56 target price for Mah Sing shares.

Last week, Mah Sing told the exchange that the developer had terminated its sale and purchase agreement with Prompt Symphony Sdn Bhd for the en bloc sale of commercial entity for RM237.09 million. The buyer had failed to pay the balance of the purchase price within the agreed period, resulting in the purchaser losing its deposit of RM42.68 million.

Mah Sing said the termination would not have any impact on its net assets, net gearing and earnings in FY09 and subsequent years as it had a found a new buyer in T S Law Realty Sdn Bhd. The purchaser will pay Mah Sing RM226.51 million for the commercial tower including the building's car park area.