PETALING JAYA: Property developer Mah Sing Group Bhd
’s outlook and prospects remain steady following a financial performance for the third quarter ended Sept 30 (3Q24) that were in line with market expectations.
Most analysts maintained a “buy” call on the stock, citing the company’s pipeline of launches leveraging demand for affordable housing, expansion of production for its glove business and venture into data centres for recurring income.
Hong Leong Investment Bank Research (HLIB Research), whose “buy” call remained unchanged with a target price of RM2.05, said the company “is on track to achieve its FY25 full-year sales target of RM2.5bil”.
“It also aims to scale up the utilisation rate for its glove business and anticipates the segment to turn profitable by 2Q25,” the research house added.
The research house noted that Mah Sing “is scaling up its launches while embarking on aggressive land acquisition to allow it to ride on the current recovery in the property market” while the expansion into the industrial segment, regional expansion of plastic manufacturing and recent data centre venture provides the company with new avenues of growth.
CIMB Research said the company’s remaining gross development value (GDV) of RM29.2bil provided good exposure to the demand for affordable housing in the Klang Valley and Johor while its strong balance sheet with net gearing as of Sept 30, 2024 of 22% enables more land acquisition to boost future GDV potential.
CIMB Research has a “buy” recommendation on the stock with an unchanged target price of RM2.10.
It added that the company could benefit from the US government’s move to hike tariffs on Chinese rubber gloves given that the US market accounted for 93% of Mah Sing’s glove exports.
“Over the mid to longer term, we expect the recurring income streams from data centre investments to help diversify its earnings beyond the traditional property development business. The key downside risk stems from any protracted delays in securing customers for the Mah Sing DC Hub @ Southville City,” it said.
RHB Research said Mah Sing’s management shared in a Nov 29 analyst briefing that it was still in discussions with its data centre joint venture partner and that an agreement would be finalised by next May. “Both parties will also lock in customers at the same time,” it said.
The research house said Mah Sing expects its glove business to turn profitable by mid-2025 as sales orders improve leveraging tariffs being imposed on Chinese gloves. RHB Research maintained a “buy” call on the stock with a target price of RM2.70.
