AmWatch - Mah Sing Group : Sea views for Feringghi Residence part duex BUY, 5 Oct 2015

STOCK FOCUS OF THE DAY

Mah Sing Group : Sea views for Feringghi Residence part duex   BUY       

We maintain BUY on Mah Sing Group with an unchanged fair value of RM2.12/share. This pegs the stock at a 15% discount to its NAV. According to The Edge Malaysia, Mah Sing is set to launch the second phase of its Feringghi Residence project in Penang by year-end. Feringghi Residence is a freehold development that comprises low-rise condo villas and high-rise resort condos on 61 acres of elevated land in Batu Feringghi. The gated development is to be developed in three phases. The parcel of land is strategically located along the famed Batu Feringghi tourist belt and ~1km away from Hard Rock Hotel Penang.

Phase 1 of Feringghi Residence (~11 acres) was launched in 4Q12. It consists of 210 apartments with built-ups of 1,510sf to 1,752sf in a five-storey block and priced between RM870k and RM1.4mil a unit. To-date, more than 90% of these units have been sold.  As for the upcoming Feringghi Residence 2, a total of 632 units will be on offer in three blocks of four, 10 and 32-storey high. The third phase (launch date yet to be confirmed) will comprise 410 resort condos, 80 town villas and 32 hillside villas. The GDV for Feringghi Residence 2 is approximately RM700mil or RM700psf-RM750psf. We expect Feringghi Residence 2 to be one of only two new launches for Mah Sing in Penang this year, given the soft market conditions. The Penang market accounts for c.6% of the group’s revised pre-sales target of RM2bil for FY15F.

While we expect Feringghi Residence 2 to be similarly well received given its strategic location and low-density features, we expect the conversion into sales to take longer compared to Phase 1. We maintain our BUY call on Mah Sing. While presales momentum will likely be muted in the near term, earnings visibility remains solid with a remaining GDV of RM26bil and unbilled sales of RM4.8bil (~2x its FY14 property revenue).

               

QUICK TAKE

Plantation Sector : Newsflow for week 28 September to 2 October          OVERWEIGHT

NEWS HIGHLIGHTS

Sime Darby : PNB sees whether Sime can raise RM6bil without rights issue

CIMB Bank : Boosts partnership with Malaysia Airlines

Property Sector : Selangor in favour of dialogue to solve RM1.18bil land deal

DISCLAIMER:

The information and opinions in this report were prepared by AmResearch Sdn Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmResearch Sdn Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmInvestment Group and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgement as of this date and are subject to change without notice.