AmInvestment Bank Research expects strong pent-up interest in the M Aspira project.
PETALING JAYA: Mah Sing Group Bhd
’s proposed acquisition of a 6.2-acre land in Taman Desa, off Jalan Klang Lama in Kuala Lumpur, has been well received by analysts.
The RM108mil acquisition from Datuk Bandar Kuala Lumpur, which analysts believe is fair price, was Mah Sing’s third land deal this year.
The land cost represented 11% of the total gross development value (GDV), which MIDF Research called as “attractive” while TA Research said it was “reasonable”.
This newly acquired land is planned for a mixed development named M Aspira, which is expected to generate an estimated GDV of RM1.01bil.
Located adjacent to the former Desa Waterpark in Taman Desa, the leasehold land benefits from excellent accessibility via several expressways. It is also conveniently situated near Bandar Malaysia.
M Aspira’s mixed-use development, envisioned over four to five years, will feature 1,600 residential units on 3.7 acres and 800 units of Residensi Madani on a 2.47-acre site with a bumiputra quota of 40%.
“The land acquisition aligns with Mah Sing’s strategy of acquiring prime locations in Greater Kuala Lumpur, Penang, and Johor to expand its M-Series projects.
“Following this acquisition, Mah Sing’s land bank will increase to 2,440 acres, with a remaining GDV of RM26.7bil,” stated TA Research.
In a note, AmInvestment Bank Research said it has raised its fair value of Mah Sing to RM2.11 per share from RM2.09, to account for the new quick-turnaround M Aspira project.
“We have also raised the financial years 2025 and 2026 (FY25 and FY26) earnings by 4% to 6% to account for the rapid contribution from M Aspira, scheduled to be open for registration of interest within the next two months even though the acquisition of the 6.2-acre leasehold land in Taman Desa from Datuk Bandar Kuala Lumpur is expected to be completed in the first half of 2025.”
AmInvestment Bank Research expects strong pent-up interest in the M Aspira project, given its mid-range affordability and high accessibility.
Prior to the latest proposed acquisition, Mah Sing has announced this year the purchase of two other land in Sepang, Selangor and Pulai, Johor.
In Sepang, it involved the acquisition of a 562-acre agricultural land in Sepang for RM101mil on Jan 31, to be converted into industrial use under Mah Sing Business Park.
In Pulai, it was announced on April 5 that a 100-acre freehold land will be acquired for RM104mil for the M Tiara 2 township development.
“After these acquisitions, we expect the group’s net gearing of 6% as at end-first quarter of FY24, to remain below 0.2 times by end-FY24.
“This remains comfortable given that the group has gross cash of RM966mil and RM506mil potential free cash flow from unsold inventories currently,” said AmInvestment Bank Research.
Meanwhile, Hong Leong Investment Bank Research noted that it was positive on Mah Sing’s latest proposed acquisition, partly due to the anticipated price point of M Aspira and its fast turnaround.
The project’s launch is expected to be by end-FY24 or early-FY25.
“We anticipate the project to add annual earnings of around RM26mil from FY26 to FY29 assuming 17% profit before tax margin and five-year development period,” said the research house.
The research house has maintained its “buy” call, with an unchanged target price of RM1.95.
