Mah Sing ready to acquire more land going forward

KUALA LUMPUR (Aug 25): Even with 2,492 acres of land already in hand, Mah Sing Group Bhd has hinted at its desire to continue amassing land or seeking more joint venture initiatives to develop more homes in the future.

In a statement today, its group managing director Tan Sri Leong Hoy Kum said Mah Sing held RM895.3 million cash as at June 30, and improved its net gearing ratio further to 0.06 times.

"The low net gearing of only 0.06 times makes the group extremely well placed to lock in land acquisition and joint venture opportunities that continue to present themselves," he said.

"The group is open to potential lands with key focus area at Greater Kuala Lumpur and new growth corridors of Iskandar Johor and Penang," he added.

As at June 30, 2016, Mah Sing had 2,492 acres of undeveloped land with gross development value of approximately RM27.5 billion, according to the statement.

"Including the unbilled sales of approximately RM4.2 billion, the total RM31.7 billion can support eight to nine years of revenue growth," Leong said.

Mah Sing has been known to quickly develop its land bank. Leong meanwhile said the group was looking to intensify its launches in the second half of the financial year ending Dec 31, 2016 (2HFY16).

"The timing is right as sentiments have improved," he added.

"Our focus has been built around 'Luxury you can afford' and we have had very positive results.

"We continued a slew of launches with our biggest township of Meridin East in Johor and the resort project of Ferringhi Residence 2 in August. Both projects saw exemplary take-ups," Leong said.

Going forward, Mah Sing expects revenue and profit contribution from Southville City @ KL South, Lakeville Residence in Taman Wahyu, and D'sara Sentral in Sungai Buloh to pick up momentum as construction work progresses.

Even for 1HFY16, Mah Sing attributed a whopping 18 development projects that contributed to the period's financials. Eleven were in the Klang Valley and Greater Kuala Lumpur, three in Penang, Iskandar Malaysia in Johor had three, as well as one in Kota Kinabalu, Sabah.

Mah Sing's 2QFY16 net earnings of RM88.82 million barely changed from last year's RM90.49 million. The property developer's overall sales, too, had a marginal 0.84% drop to RM773.9 million from RM780.48 million.

Its 1HFY16 net profit dipped by 2.92% to RM183.85 million or 6.87 sen a share, from RM189.38 million or 8.34 sen a share.

Mah Sing's revenue came to RM1.48 billion in the period, 5.21% lower than the previous year's RM1.56 billion. Its property business's sales fell at a bigger clip of 6.8% to RM1.32 billion.

The drop was offset by the plastics division's growth of 9.81% to RM123.83 million in 1HFY16.

Nonetheless, Mah Sang's property division raked in a higher pre-tax profit of RM254.49 million. The group said this was due to lower selling, marketing and administrative expenses during the current financial period.

Mah Sing's latest net asset per share value is RM1.30, while its share price as at noon break was 23.08% higher than the book value. Mah Sing has a market capitalisation of RM3.88 billion.

At 2.41pm, Mah Sing dipped 1 sen or 0.62% to RM1.60 with 372,300 shares done. — theedgemarkets.com

Try out one of our super tools, the rental yield calculator, here.