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Analysts say Mah Sing’s acquisition of Taman Desa land is positive

Posted on by darion

KUALA LUMPUR: Mah Sing Group BhdAnalysts consider the company’s acquisition of 6,169 acres of land in Taman Desa, Kuala Lumpur for 108 million ringgit to be a positive development.

The developer said the land will be developed in two phases with an estimated gross development value (GDV) of RM1.01 billion.

“We are positive about the land acquisition as it is in line with Mah Sing’s strategy to build affordable M-series projects in the Klang Valley,” MIDF Research said in a report.

The research house noted that the land is strategically located in Taman Desa, with access to multiple expressways and a wide range of amenities such as Mid Valley Megamall and KL Eco City.

MIDF said the land cost to GDV ratio of 11% is attractive. Mah Sing plans to start registering businesses in the third quarter of fiscal 2024, in line with its rapid restructuring strategy.

“We estimate Mah Sing’s net gearing ratio to increase from 0.06x in 1QFY24 to 0.09x. We believe Mah Sing’s low net gearing ratio will allow the company to continue its aggressive land banking activities,” it added.

MIDF maintained a buy recommendation on Mah Sing shares, setting the target price from RM1.94 to RM1.97.

Meanwhile, Kenanga Research believes the developer is paying a fair price for the land.

“At RM402 per square foot, we believe Mah Sing is paying a fair price considering asking prices in the area are around RM400-450 per square foot.”

Kenanga said the apartment’s asking price of RM448,000 for 708 sq ft (RM633 psf) was reasonable compared to the asking prices of similar units in the area, ranging from RM480,000 to RM550,000, offered on property websites.

“Overall, we are slightly positive as the planned development is reasonably priced within a highly desirable address in a mature area, which allows for quick monetization,” it added.

Kenanga raised its target price by 0.5% to RM1.88 from RM1.87, reflecting an improvement from its last project. It maintained a “market perform” rating on Mah Sing.