Mah Sing Q1 net profit up 21%

Leong: “The strong sales in the first quarter are contributed by offerings in the right locations

Good contribution from strong project work progress

PETALING JAYA: Mah Sing Group Bhd’s first quarter ended March 31 net profit climbed 21% to RM84.02mil on stronger work progress from its ongoing development projects.

Quarterly revenues grew to RM642.2mil from RM423.1mil. Analysts expect sales to pick up in the coming quarters.

Mah Sing said in a statement that it achieved property sales of approximately RM770mil as of March 31, 2014.

“The strong sales in the first quarter are contributed by offerings in the right locations, coupled with good township and mixed development planning, concept and designs in line with market trends,” Mah Sing’s group managing director Tan SriLeong Hoy Kum said.

“About 87% of our planned residential launches for the current year are priced below RM1mil to target demand for mid-range homes from first-time homebuyers and the growing middle-income households,” he added in the statement.

Mah Sing said that strong sales were locked in from affordable high rises such as Savanna Executive Suites at Southville City@KL South, Bangi, and D’sara Sentral in Sungai Buloh.

The preview of Lakeville Residence in Taman Wahyu, Kepong where the residential suites are indicatively priced from RM529,800 also received good response.

The affordable landed link homes in new phases of MResidence 1 and M Residence 2 in Rawang continued to see strong take-up, the company noted.

Mah Sing noted that it had strong earnings visibility, with unbilled sales of approximately RM4.64bil as at March 31, 2014 or 2.7 times the revenue recognised from the property division in 2013.

Meanwhile, RHB Research in a report noted that Mah Sing’s first quarter results were in line with expectations and it believed that sales would see a pick-up in the coming quarters.

RHB maintained its “buy” rating on the stock with a higher fair value of RM2.50 after inclusion of its incremental value of its recently acquired golf course land.

While, KAF-Seagroatt & Campbell Securities said it continued to like the stock for its attractive valuations of 11.2 times FY14 forecast price-to-earnings (PE) and 1.5 times price-to-book (PB) versus the sector’s at 13.7 times FY14F PE and 1.1 times PB that is supported by a 16% return on equity.

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