‘Sentul land pur­chase to boost Mah Sing’s GDV to RM32b’

New Straits Times - - Business -

KUALA LUMPUR: Mah Sing Group Bhd’s re­cently ac­quired land in Sentul, here, worth RM95 mil­lion will raise the de­vel­oper’s re­main­ing gross devel­op­ment value (GDV) to RM32 bil­lion and help beat its sales tar­get of RM1.8 bil­lion this year.

CIMB Re­search said Mah Sing will un­der­take a res­i­den­tial devel­op­ment on the land com­pris­ing ser­viced apart­ments, with es­ti­mated GDV of RM1.3 bil­lion.

Tar­geted to be launched in the sec­ond half of this year, units in the project will be priced start­ing from RM326,000 a unit.

The project hits a sweet spot in the Klang Val­ley res­i­den­tial prop­erty mar­ket where there is strong pent-up de­mand from house buy­ers and an un­der­sup­ply of prop­er­ties for this price range in the past few years, said CIMB Re­search.

With the project, the re­search house said Mah Sing stands a higher chance of beat­ing its sales tar­get of RM1.8 bil­lion this year.

Mah Sing has spent RM55 mil­lion on ac­quir­ing a 78 per cent stake in a pri­vate devel­op­ment com­pany, which will in turn ac­quired the 3.4ha plot in Sentul for RM95 mil­lion.

The deal marks the sec­ond land ac­qui­si­tion un­der­taken by Mah Sing after a hia­tus of more than two years.

With a cash bal­ance of RM923 mil­lion as at end-fi­nan­cial year 2016, CIMB Re­search said the project has a small im­pact on the group’s bal­ance sheet strength.

“This ac­qui­si­tion also reaf­firms our be­lief that Mah Sing has re­gained its ap­petite for land­bank­ing. Fu­ture land acquisitions could po­ten­tially re-rate its share price as new land­bank typ­i­cally raises a prop­erty de­vel­oper’s reval­ued net as­set value,” it added.

CIMB Re­search has main­tained an “add” call on Mah Sing, with an un­changed tar­get price of RM1.85.

Po­ten­tial up­ward re­vi­sion in Mah Sing’s sales tar­get is a pos­si­ble re-rat­ing cat­a­lyst for its share price, it added.

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