By Sharen Kaur
sharen@nstp.com.my
Published in NST on August 9, 2012
sharen@nstp.com.my
Published in NST on August 9, 2012
KUALA LUMPUR: Mah Sing Group Bhd, the sixth largest property stock by market capitalisation, is expected to ink one or two deals to buy land in the Klang Valley for between RM100 million and RM150 million in the next quarter, sources said.
The group is targeting to acquire land with gross development value (GDV) of RM5 billion this year. It has acquired land in Rawang, Kota Kinabalu and Bandar Baru Bangi for a combined RM452.3 million, which is 73 per cent of its GDV target.
The land cost translates into about 12 percent of the RM3.65 billion GDV that it has achieved.
Mah Sing would need another RM1.4 billion in GDV to achieve its full-year target. Assuming the land cost is also about 12 per cent of the GDV, it equates to about RM150 million.
Group managing director and group chief executive Tan Sri Leong Hoy Kum told Business Times it is buying a large piece of land in the Klang Valley to build mixed landed properties. He declined to elaborate on the proposed development a nd land cost.
He said Mah Sing was eyeing more land in Greater Kuala Lumpur, Pena ng, Johor, Sabah, Perak, Malacca and Kedah and is especially interested in developing the Rubber Research Institute of Malaysia land in Sungai Buloh.
AmResearch views Mah Sing as the emerging proxy to the Malaysian property sector.
Mah Sing has 39 residential, commercial and industrial projects, with remaining GDV and unbilled sales of RM18.2 billion. Its undeveloped landbank of 613ha has an estimated GDV of RM15.6 billion.
According to its 2011 annual report, its cash and bank balances stand at a healthy RM665 million. Its borrowings are at RM705.5 million plus redeemable convertible secured bonds of RM268.3 million
AmResearch estimates Mah Sing's earnings to increase from RM169 million in fiscal 2011 to RM209 million in the current financial year.
It also forecasts earnings to improve to RM260 million in 2013, and RM320 million in the following year.
The estimations are in line with Mah Sing's earnings growth target of 20 to 25 per cent a year.
AmResearch also expects Mah Sing's property sales to rise to RM3.5 billion next year and RM4 billion in 2014, from the targeted RM2.5 billion this year.
The research house has recommended the company's stock a "buy" with a fair value of RM3.60 per share (current price as at report date - RM2.42).
Based on its market cap, AmResearch views that Mah Sing is undervalued from both the earnings (forward price earnings is six to 10 times and earnings per share compound annual growth rate is 24 per cent) and assets standpoint (50 per cent discount to their net asset value of RM4.80).
Mah Sing shares closed unchanged at RM2.41 yesterday.
The group is targeting to acquire land with gross development value (GDV) of RM5 billion this year. It has acquired land in Rawang, Kota Kinabalu and Bandar Baru Bangi for a combined RM452.3 million, which is 73 per cent of its GDV target.
The land cost translates into about 12 percent of the RM3.65 billion GDV that it has achieved.
Mah Sing would need another RM1.4 billion in GDV to achieve its full-year target. Assuming the land cost is also about 12 per cent of the GDV, it equates to about RM150 million.
Group managing director and group chief executive Tan Sri Leong Hoy Kum told Business Times it is buying a large piece of land in the Klang Valley to build mixed landed properties. He declined to elaborate on the proposed development a nd land cost.
He said Mah Sing was eyeing more land in Greater Kuala Lumpur, Pena ng, Johor, Sabah, Perak, Malacca and Kedah and is especially interested in developing the Rubber Research Institute of Malaysia land in Sungai Buloh.
AmResearch views Mah Sing as the emerging proxy to the Malaysian property sector.
Mah Sing has 39 residential, commercial and industrial projects, with remaining GDV and unbilled sales of RM18.2 billion. Its undeveloped landbank of 613ha has an estimated GDV of RM15.6 billion.
According to its 2011 annual report, its cash and bank balances stand at a healthy RM665 million. Its borrowings are at RM705.5 million plus redeemable convertible secured bonds of RM268.3 million
AmResearch estimates Mah Sing's earnings to increase from RM169 million in fiscal 2011 to RM209 million in the current financial year.
It also forecasts earnings to improve to RM260 million in 2013, and RM320 million in the following year.
The estimations are in line with Mah Sing's earnings growth target of 20 to 25 per cent a year.
AmResearch also expects Mah Sing's property sales to rise to RM3.5 billion next year and RM4 billion in 2014, from the targeted RM2.5 billion this year.
The research house has recommended the company's stock a "buy" with a fair value of RM3.60 per share (current price as at report date - RM2.42).
Based on its market cap, AmResearch views that Mah Sing is undervalued from both the earnings (forward price earnings is six to 10 times and earnings per share compound annual growth rate is 24 per cent) and assets standpoint (50 per cent discount to their net asset value of RM4.80).
Mah Sing shares closed unchanged at RM2.41 yesterday.
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