Mah Sing’s 2Q23 results are within expectations. 1H23 sales already hit RM1.2bn, and the company should achieve its RM2.2bn sales target by year-end.
“Management had earlier indicated its intention to expand the industrial portfolio, and we think this could potentially be a share price catalyst, especially if tenants or clients are secured upfront,” said RHB Research (RHB) in the recent Malaysia Results Review Report.
2Q23 revenue was very much flat from the previous quarter. Meanwhile, revenue for the manufacturing segment dropped by about 9% QoQ, while operating losses still remained at RM4m per quarter.
Mah Sing’s cash position strengthened, given the timely project completions and vacant possession of properties YTD.
Unsold completed inventory stood at RM579.3m, compared with RM674.3m in FY22.
“We raise our Target Price to reflect better market sentiment ahead, given the lifting of the political overhang post state elections,” said RHB, maintaining the Buy Rating and a Target Price of RM0.98.
The company’s new property sales came up to RM600.4m vs RM600.6m in 1Q23. Key contributors included the following projects: M Astra (RM345m), Meridin East (RM202m), M Vertica (RM150m) and M Senyum (RM139m).
Demand for mid-range housing is still strong, as M Nova in Kepong, launched earlier this month, had a take-up of 90% for its Tower A.
In 2H, upcoming launches include M Minori in Johor Bahru, future phases of M Senyum, Meridin East, M Panora and M Sinar. The four parcels of land acquired so far this year (in Puchong, Johor Bahru, Semenyih and Kepong) should yield a Gross Domestic Value of RM5bn in total. This should underpin property sales and earnings over the medium/long term. Unbilled sales for 2Q23 rose to RM2.34bn, from RM2.26bn as at 1Q23.
