We maintain BUY on Mah Sing, with an unchanged fair value of
RM2.24/share (10% discount to NAV). It has had another successful launch
over the last weekend, in a 100% take-up of all 404 serviced apartments at the
launch of Cerrado Residential Suites Tower A, which has a total GDV of
~RM190mil. This is the 3rd of launch at the 7-phase RM11.1bil, 428-acre
Southville City township, after Savanna Executive Suites and Lifestyle Shops
(1st phase) and Avens Residence landed super link homes (2nd phase). Southville
has locked-in sales of RM1.77bil from 3,800 units to-date since the first
launch over two years ago. Due to the overwhelming response, registration for
Tower B has begun, with the official launch on 13 and 14 August 2016 to be
carried out via balloting.
All in, Cerrado, with a GDV of RM800mil, comprises 4 towers
of 404 serviced apartments each. On offer will also be a total of 48 retail
shop lots and 10 poolside cabanas (akin to two-storey link-homes). The shops
offer an average built-up of 1,400 sq ft priced from RM1.1mil, while the
average built-up for the Cabanas is 1,800 sq ft, also priced from RM1.1mil. The
launch of Cerrado marked its collaboration with BSN's Youth Housing Scheme,
which offers young married couples 100% loans of RM100k-RM500k and an
additional 5% for MRTA. The government also offers a RM200/month disbursement
for two years and 50% stamp duty exemption on the S&P and legal documents.
Following this, Mah Sing has YTD launched ~RM700mil worth of properties, out of
its target of RM2bil for FY16 (vs. RM1.985bil of launches in FY15). It is
targeting sales of RM2.3bil, at par with FY15's. Unbilled sales as at end-March
2016 totalled RM4.53bil, 1.6x of FY15 property development revenue, including
RM474mil of final-stage billings over 2Q-4QFY16. Its prospects are backed by a
healthy balance sheet, with a net gearing of 0.09x (cash pile of RM1.1bil) as
at end-March 2016.
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