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Mah Sing Group
? 1H10 net profit of RM57.0m came within expectations, making-up 51% of street’s FY10E net profit of RM112.5m and 50% of our RM113.4m. Mah Sing Group (MSGB) also achieved its FY10E sales target of RM1b within 7M10 (1H10 sales of RM918m is 3x of 1H09 sales), mainly from Garden Residence@Cyberjaya, Perdana Residence 2, iParc@Bukit Jelutong and iParc@Shah Alam.
? YoY, 1H10 net profit grew by 25% on the back of RM1.17b worth of launches and subsequent high take-up rates. However, 1H10 EBITDA margins compressed by 3.0ppt QoQ to 19.0% as 1) earnings mix skewed towards lower margin products like its Perdana series (e.g. Aman Perdana, iParc@Bkt Jelutong) 2) margins tend to be relatively low when new projects (e.g. Garden Residence, Perdana Residence2) are at initial stages commences 3) cost of rental guarantee scheme arising from the sale an leaseback arrangement f or Icon@Jln Tun Razak.
? QoQ, 2Q10 pretax profit increased 15% to RM48.0m from higher billings, especially from its on-going developments like Southgate, iParc@Bkt Jelutong, StarParc Pt, Residence@Southbay and Aman Perdana.
? EBITDA margins are expected to improve in 2H10 as there will be more billings from high end margin projects and near completion projects (e.g. Southgate) which will likely result in FY10E EBITDA margins of 20%-21%.
? Maintaining FY10-11E net profit of RM113.4m (+20% YoY) – RM142.0m (+25% YoY). As a result of stunning Ytd sales, MSGB has increased its FY10E sales target by 50% to RM1.5b vs. our current RM1.3b target. We maintain our sales target for now, pending 9M10 sales performance. Nonetheless, any outperformance in sales in 2H10 vs. our target will only significantly contribute towards the tail-end of FY11 to FY12 since most of its gated & guarded developments are strata-titled (3-yr recognition period). Upcoming launches/previews in the next couple of months include M-Suites@Jln Ampang (GDV: RM257m), Kinrara Residences (GDV: RM830m including JV portion) and One Legenda (GDV: RM92m). Unbilled sales of RM1.17b provides >1 yr visibility.
? BUY maintained with unchanged fair value of RM2.20 based on FD SoP RNAV. MSGB continues to be our favourite because; 1) strong news flow from high takeup rates and aggressive landbanking 2) 22% 3-yr CAGR 3) better than average FY10-11E dividend gross yields of 4.1%-5.0% vs peers 2%-3%.
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? 1H10 net profit of RM57.0m came within expectations, making-up 51% of street’s FY10E net profit of RM112.5m and 50% of our RM113.4m. Mah Sing Group (MSGB) also achieved its FY10E sales target of RM1b within 7M10 (1H10 sales of RM918m is 3x of 1H09 sales), mainly from Garden Residence@Cyberjaya, Perdana Residence 2, iParc@Bukit Jelutong and iParc@Shah Alam.
? YoY, 1H10 net profit grew by 25% on the back of RM1.17b worth of launches and subsequent high take-up rates. However, 1H10 EBITDA margins compressed by 3.0ppt QoQ to 19.0% as 1) earnings mix skewed towards lower margin products like its Perdana series (e.g. Aman Perdana, iParc@Bkt Jelutong) 2) margins tend to be relatively low when new projects (e.g. Garden Residence, Perdana Residence2) are at initial stages commences 3) cost of rental guarantee scheme arising from the sale an leaseback arrangement f or Icon@Jln Tun Razak.
? QoQ, 2Q10 pretax profit increased 15% to RM48.0m from higher billings, especially from its on-going developments like Southgate, iParc@Bkt Jelutong, StarParc Pt, Residence@Southbay and Aman Perdana.
? EBITDA margins are expected to improve in 2H10 as there will be more billings from high end margin projects and near completion projects (e.g. Southgate) which will likely result in FY10E EBITDA margins of 20%-21%.
? Maintaining FY10-11E net profit of RM113.4m (+20% YoY) – RM142.0m (+25% YoY). As a result of stunning Ytd sales, MSGB has increased its FY10E sales target by 50% to RM1.5b vs. our current RM1.3b target. We maintain our sales target for now, pending 9M10 sales performance. Nonetheless, any outperformance in sales in 2H10 vs. our target will only significantly contribute towards the tail-end of FY11 to FY12 since most of its gated & guarded developments are strata-titled (3-yr recognition period). Upcoming launches/previews in the next couple of months include M-Suites@Jln Ampang (GDV: RM257m), Kinrara Residences (GDV: RM830m including JV portion) and One Legenda (GDV: RM92m). Unbilled sales of RM1.17b provides >1 yr visibility.
? BUY maintained with unchanged fair value of RM2.20 based on FD SoP RNAV. MSGB continues to be our favourite because; 1) strong news flow from high takeup rates and aggressive landbanking 2) 22% 3-yr CAGR 3) better than average FY10-11E dividend gross yields of 4.1%-5.0% vs peers 2%-3%.
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