The investment bank has maintained a “buy” call on Mah Sing, increasing its target price to 77 sen from 65 sen, with the group’s shares having a 21% upside and 5% yield.
Mah Sing has a strong property market momentum after hitting RM2.12 billion sales last year, noted RHB. The group has set a RM2.2 billion sales target for properties this year.
Its M Vertica project in Cheras and M Astra in Setapak have seen “very encouraging take-up rates” in December 2022 and March 2023, which prompted the group to open up for sale both projects’ final towers, said the report.
The improving rate of industry loan approval would also result in better conversion of bookings into contractual sales for the company, it added.
Meanwhile, RHB said Mah Sing is likely to continue their land banking activities by purchasing more land parcels for development after acquiring the Puchong land in January.
Reflecting on the group’s past projects, RHB said the land bank turnaround time for Mah Sing will be “fast and efficient”.
On the gloves market, RHB felt confident that Mah Sing’s prospects will improve given that the average selling price of gloves has hit rock-bottom and the group has implemented relevant cost measures.
“Hence, as volume improves, we believe the losses for the manufacturing division will narrow down faster, while the plastic manufacturing business remains steady,” it said.
Following up on the group’s recent China visit, RHB said it is upbeat about Mah Sing’s collaboration with the China Electronics Chamber of Commerce (CECC), which can open doors in the industrial property development sector.
Mah Sing had announced earlier this month that it will cooperate with CECC members who plan to set up businesses in Malaysia in terms of land sourcing and the setting up of production facilities for export activities.
RHB remarked: “Given the ongoing United States-China trade war, Malaysia may benefit as some manufacturers based in China have decided to relocate”.
“This potential tie-up may open up opportunities for the group to expand its industrial development in future, and this segment is now gaining traction in the real estate industry,” it added.
At 11.30 a.m. the group’s share price stood at 62 sen, up 10.71% or 6 sen since the start of the year, valuing Mah Sing at RM1.49 billion.