RHB IB is upbeat on Mah Sing Group Bhd’s latest land acquisition in Sepang, which is planned for Mah Sing Business Park’s development due to the land being reasonably priced and collaboration with a Chinese party.
Therefore, the research house raises its target price (TP) to RM1.12 from RM0.98, 19% upside and 4% yield.
“We also maintain our BUY call. Impact to our FY25F earnings is minimal. Our new TP is now based on a 50% discount to revalued net asset value (RNAV) from 55%, given improving sentiment in the property market,” it said in its Malaysia Company Update today (Feb 2).
Apart from the land’s reasonable pricing, RHB IB said the company’s collaboration with a Chinese party should also ensure promising take-up of industrial properties in this project, in its view.
Mah Sing had entered into a conditional sale and purchase agreement with Premier Land Resources Sdn Bhd under private plantation firm Yuwang Group to acquire 561.65 acres of leasehold agricultural land in Sepang.
The acquisition involves an initial parcel measuring 185 acres with a purchase consideration of RM100.7 million (or RM12.50 per sf).
It comes with an option to purchase the 376.65-acre balance in adjacent parcels within four years at the same land price of RM12.50 per sf (188 acres within two years and the 188.65-acre balance within four years).
The research house said the collaboration will be jointly developed by Mah Sing South Sea Industrial Development (MSSSID) and the landowner, through 80:20 arrangement.
MSSSID is 70:30 joint venture (JV) between Mah Sing and The South Sea Capital by Sun Jian Wei, who is Malaysia Jiangsu Entrepreneurs Business Association executive president.
“Leveraging on Sun’s established network with potential investors from Jiangsu Province and neighbouring Shanghai, as well as Mah
Sing’s profile in the plastics manufacturing sector, we believe this new business park will see encouraging take-up upon its launch in 2H24.
Mah Sing Business Park will be 10km from the Kuala Lumpur International Airport (KLIA) near reputable logistics hubs Cainiao Warehouse by Alibaba Group, POS Aviation E Commerce Hub, and DHL Global Forwarding.
The site is also well-connected via major highways such as KLIA Expressway, ELITE Highway and North-South Expressway. Surrounding amenities include the ERL Salak Tinggi Station and KIP Mall in Kota Warisan
The park that has a gross development value (GDV) of up to RM2 billion for the entire 561.65 acres, comprises of customised factories, industrial lots, cluster, and semi-detached and detached factories catering for medium and light industrial activities.
