Stock Name: MAHSING
Company Name: MAH SING GROUP BHD
Research House: MIDF
Mah Sing Group Bhd
(April 13, RM2.60)
Maintain buy at RM2.59 with target price RM2.90: MSGB announced the proposed acquisition of nine parcels of contiguous prime freehold land in Tanjung Kupang, Johor Bahru, for a total cash consideration of RM54.7 million. The land measures approximately 205.7 acres (83.2ha), placing its value at an average of'' RM6.10 psf.
The tract is strategically located within the Iskandar Development Region in close proximity to Flagship Zone C, where the key economic activities are port and marine services, warehousing, logistics, engineering, hi-tech manufacturing, food'' production, petrochemicals and entrepot'' trade. It is a mere 1km from the Port of Tanjung Pelepas and 23km to Jurong Industrial Estate in Singapore.
MSGB proposes to develop the land into an integrated industrial and business park named Mah Sing i-Parc. It may comprise semi-detached factories, detached factories and shopoffices with an estimated gross development value (GDV) of RM610 million.
There will also be some plots of factory land measuring approximately 0.5 to one acre per lot for sale within the industrial park. The development is expected to commence in 4Q11 and will be developed over five years.
MSGB intends to fund the land acquisition through internally generated funds and bank borrowings. If we were to assume that 80% or RM43.8 million of the purchase price is financed through bank borrowings, the pro forma net gearing position of MSGB as at FY10 would be only 0.26 times.
The proposed i-Parc development is expected to generate total earnings of about RM92 million during the next five years (or approximately RM18 million per year). This acquisition is part of MSGB's ongoing landbanking strategy to achieve sustainable long-term earnings growth.
Maintain 'buy' with a target price of RM2.90. Our TP is derived from Mah Sing's realisable net asset value (RNAV) parity. While the'' proposed i-Parc development is expected to be value accretive, its inclusion into our RNAV calculation shall be upon its definite launch. As at 1Q11, Mah Sing had a combined GDV balance and unbilled sales of RM8.2 billion and RM1.3 billion respectively. ' MIDF Research, April 13
This article appeared in The Edge Financial Daily, April 14, 2011.
Company Name: MAH SING GROUP BHD
Research House: MIDF
Mah Sing Group Bhd
(April 13, RM2.60)
Maintain buy at RM2.59 with target price RM2.90: MSGB announced the proposed acquisition of nine parcels of contiguous prime freehold land in Tanjung Kupang, Johor Bahru, for a total cash consideration of RM54.7 million. The land measures approximately 205.7 acres (83.2ha), placing its value at an average of'' RM6.10 psf.
The tract is strategically located within the Iskandar Development Region in close proximity to Flagship Zone C, where the key economic activities are port and marine services, warehousing, logistics, engineering, hi-tech manufacturing, food'' production, petrochemicals and entrepot'' trade. It is a mere 1km from the Port of Tanjung Pelepas and 23km to Jurong Industrial Estate in Singapore.
MSGB proposes to develop the land into an integrated industrial and business park named Mah Sing i-Parc. It may comprise semi-detached factories, detached factories and shopoffices with an estimated gross development value (GDV) of RM610 million.
There will also be some plots of factory land measuring approximately 0.5 to one acre per lot for sale within the industrial park. The development is expected to commence in 4Q11 and will be developed over five years.
MSGB intends to fund the land acquisition through internally generated funds and bank borrowings. If we were to assume that 80% or RM43.8 million of the purchase price is financed through bank borrowings, the pro forma net gearing position of MSGB as at FY10 would be only 0.26 times.
The proposed i-Parc development is expected to generate total earnings of about RM92 million during the next five years (or approximately RM18 million per year). This acquisition is part of MSGB's ongoing landbanking strategy to achieve sustainable long-term earnings growth.
Maintain 'buy' with a target price of RM2.90. Our TP is derived from Mah Sing's realisable net asset value (RNAV) parity. While the'' proposed i-Parc development is expected to be value accretive, its inclusion into our RNAV calculation shall be upon its definite launch. As at 1Q11, Mah Sing had a combined GDV balance and unbilled sales of RM8.2 billion and RM1.3 billion respectively. ' MIDF Research, April 13
This article appeared in The Edge Financial Daily, April 14, 2011.
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