KUALA LUMPUR (Feb 2): TA Securities has maintained its “buy” rating on Mah Sing Group Bhd at 94 sen, with a higher target price (TP) of RM1.19 (from 95 sen), and said it is positive on a deal for Fusion Heights Development Sdn Bhd (FHD), a wholly-owned subsidiary of 70%-owned Mah Sing South Sea Industrial Development Sdn Bhd (MSSSID), for a sale and purchase agreement for the acquisition of a 185-acre land from Premier Land Resources Sdn Bhd (the landowner) at a purchase consideration of RM101 million (or RM12.50 psf).
In a note on Friday, the research house said it is optimistic about the positive impact of the strategic collaboration between FHD, MSSSID and the landowner.
“Overall, we are positive about the land deal, as it offers the group an opportunity to broaden its development portfolio, expanding beyond its residential focus to include industrial projects.
“In fact, Mah Sing is no stranger to industrial development, considering its successful track record with the completion of five industrial parks to date,” it said.
TA Securities said Mah Sing had expressed confidence in achieving its 2023 sales target of RM2.2 billion, and anticipates that the 2024 sales target will surpass total sales in 2023, driven by new launches and active land acquisitions.
“Given this positive outlook, we raise our target price-to-book (P/B) multiple to 0.75 times from 0.6 times, and arrive at a new TP of RM1.19 (from 95 sen).
“We believe our target P/B is considered reasonable, especially when considering the stock's historical trading range of 0.8 times to 1.2 times forward P/B during the previous upcycle in 2012-2013,” it said.