We maintain our BUY call on Mah Sing Group (Mah Sing) with an unchanged fair value of RM0.79 per share, based on a 60% discount to its RNAV (Exhibit 3). We make no changes to our FY20–22 net profit forecasts.
Mah Sing’s M Adora, Wangsa Melawati Sales Gallery was opened yesterday 16th July 2020 near the project site. The official launch will be held on 18th July 2020.
Sitting on a 4.515-acre leasehold land, featuring two blocks of condominium (677 units), M Adora is targeted for the affordable segment with prices starting from RM468K (RM550psf) per unit and built-up from 850 sq ft. with 2-3 car parks. The project has a GDV of approximately RM378mil.
M Adora comes with a wide array of facilities such as multitiered security, kindergarten, nursery, surau, laundry, swimming pool, gymnasium, garden, BBQ area etc.
We expect M Adora to be a strong seller given its affordability and close proximity to KL city centre (9km) and is surrounded by established neighbourhoods such as Lembah Keramat, Wangsa Maju, Desa Setapak, Setapak Jaya, Setiawangsa, Ukay Perdana, and KL East. Wangsa
Wangsa Melawati is accessible via major highways such as the MRR2, DUKE and EKVE. In terms of public transportation, M Adora is about 0.9km from the Wangsa Maju Mall’s covered walkway to Sri Rampai LRT station. Management will provide shuttle service for M Adora home buyers to the Sri Rampai LRT Station.
To recap, Mah Sing launched 2 of its key project in the past 8 months, namely M Oscar (Sri Petaling) in October 2019 and M Luna (Kepong) in June 2020. Both projects are well received with take up rates of 62% and 91% respectively.
We believe the long-term outlook for Mah Sing remains positive backed by strong sales achieved in the past few quarters. Moreover, we expect the new projects in Klang Valley to perform well given their strategic locations and attractive pricing. We viewed the recent selldown on the stock as a buying opportunity with an undemanding P/BV of 0.2x and a potential upside of more than 40%, hence we are maintaining our BUY recommendation
Source: AmInvest Research - 17 Jul 2020