TA Research pointed out that Mah Sing’s sales for 1Q23 accounted for 27% of the group’s FY23 target, and hence, appeared on track to achieve the RM2.2bil sales target for FY23.
PETALING JAYA: The outlook for Mah Sing Group Bhd
is bright for the remainder of its financial year ending Dec 31, 2023 (FY23), following a solid performance for the first quarter (1Q23) of the year.
Supported by conversion of bookings and new projects worth about RM1.4bil, the property developer, which also has business in plastics and healthcare, is expected to register robust sales for FY23.
In its research note, TA Research pointed out that Mah Sing’s sales for 1Q23 accounted for 27% of the group’s FY23 target, and hence, appeared on track to achieve the RM2.2bil sales target for FY23.
Mah Sing reported take-up rates ranging of 85% to 95% for its new launches in 1Q23, indicating that the demand for affordable housing in urban areas remained robust, the brokerage said.
TA Research maintained “buy” on Mah Sing, with an unchanged target price of 71 sen.
However, it said Mah Sing’s glove-manufacturing business would likely continue to operate at a loss in FY23 due to the low average selling price and dismal demand outlook.
“Management has indicated their focus on implementing additional cost reduction measures to improve the division’s performance,” TA Research said.
Mah Sing posted a net profit of RM50.06mil for 1Q23, up from a net profit of RM43.18mil in 1Q22, while revenue was up to RM643.45mil from RM433.23mil.
On a segmental basis, the property development segment recorded an operating profit of RM89.7mil, up 20.4% year-on-year (y-o-y), and revenue of RM514.8mil, up 61.2% y-o-y, due to higher property sales and progressive recognition from ongoing construction progress.
The manufacturing segment’s revenue grew 6.5% y-o-y to RM114.7mil due to the increased sales of plastic pallets, automotive parts and gloves.
The segment’s operating loss narrowed 52.6% y-o-y to RM3.7mil due to efforts to improve glove plant utilisation and cost management.
