Mah Sing's 1Q profit comes in at RM95m as M City, Icon City near completion

KUALA LUMPUR (May 26): Premier lifestyle developer Mah Sing Group Bhd posted a net profit of RM95.03 million or 3.18 sen per share in its first financial quarter ended March 31, 2016 (1QFY16), a slight decline from the RM98.89 million or 4.63 sen a share it recorded in 1QFY15.

It saw a decrease in quarterly revenue — it came in at RM709.17 million compared to RM784.14 million in the same period last year — because M City in Jalan Ampang and Icon City in Petaling Jaya, which were in active construction stage last year, are approaching completion in the current period.

Despite a decrease in revenue from property development, there was no major fluctuation in operating profit — it slid 0.2% to RM124.1 million — mainly because of lower expenses during the current quarter, Mah Sing said in its bourse filing today.

The group has planned more launches for the second half of 2016, as the first quarter of the year is a typically shorter working quarter following the festive seasons.

"In spite of that, the group achieved property sales of RM407.9 million for 1QFY16, and RM536.4 million for the four months ended April 30, 2016," it noted.

As at March 31, 2016, the group has about RM4.53 billion unbilled sales and a remaining gross development value of approximately RM27.73 billion, which are expected to support the group's revenue growth for eight to nine years.

In a statement, the group said the unbilled sales represents approximately 1.61 times revenue recognised from property in 2015, and will provide ample short-term liquidity.

Mah Sing group managing director Tan Sri Leong Hoy Kum said attractive price points and good locations of the group's projects are still generating keen interest from end-users.

"For example, the soft launch of landed linkhomes in Meridin East, Johor Bahru, was met with positive response, with over 80% take-up in less than two months. We also received encouraging bookings for new blocks in our D'Sara Sentral and Lakeville Residence.

"As the property sector undergoes consolidation, demand for affordable mass market properties continues to outpace supply. We are well positioned for current market condition, with 89% of our planned 2016 residential launches priced below RM1 million per unit," he added in the same statement.

Macquarie Research, which had maintained Mah Sing as its top pick in the Malaysian property market in a May 24 note, noted that the group has a weighted average take-up rate of 90% across its portfolio of 23 development projects, much above the Malaysia average of 63%, as per data by the National Property Information Centre.

"We believe strategic locations of its projects, mostly in the central region, combined with affordable pricing, will boost the company's overall take-up rates.

"In addition, its 4.4% FY16 estimate dividend yield will provide additional support to the share price," the research firm said.

At 2.30pm today, Mah Sing shares were one sen or 0.67% lower at RM1.49, for a market capitalisation of RM3.6 billion. – theedgemarkets.com

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