MIDF Investment Bank (MIDF) raised its target price for Mah Sing Group Berhad (Mah Sing) to RM1.94 (from RM1.83) due to a positive outlook. They maintained a BUY call, projecting a 16.2% share price return and a 19.2% total return, including dividends.
MIDF reported that after a meeting with Mah Sing’s management, the prospects looked promising. Mah Sing aimed to hit a sales target of RM2.5 billion for FY24, driven by robust demand for its M-Series affordable homes, with many projects priced below RM500,000. Upcoming launches included M Zenya in Kepong, M Azura in Setapak, and others, indicating strong sales potential.
The company was also diversifying into the mid-high and high-end property markets due to growing demand and improving market conditions. Mah Sing planned to expand its industrial portfolio by developing MSS Business Park in Sepang, reflecting a strategic move to tap into the rising demand for industrial properties in Malaysia.
A notable diversification move was Mah Sing’s venture into data centres, earmarking 150 acres in Southville City, Bangi, for the Mah Sing DC Hub. This followed a collaboration with Bridge Data Centres (BDC) to develop data centre facilities, expected to contribute RM25 million annually from FY26. Further potential data centre developments were eyed in Sepang and Johor Bahru.
Mah Sing was also focusing on its manufacturing division, including plastic and gloves manufacturing. The division turned around from an operating loss in 1QFY23 to a minimal profit in 1QFY24 due to improved efficiency in glove manufacturing. The company expanded its plastic manufacturing to Indonesia, with plans for better performance in glove manufacturing due to rising average selling prices and demand. Mah Sing intended to list its manufacturing division within three years to unlock its value.
MIDF noted that Mah Sing’s financials were strong, with a low net gearing ratio of 0.06x. This robust balance sheet, combined with the company’s diversified income streams and strategic expansions, supported the positive long-term outlook. MIDF revised its FY26 earnings forecast upwards by 6.4%, reflecting the expected contributions from the data centre collaboration.Investors were encouraged to consider Mah Sing’s shares due to its strategic expansions, strong financial health, and the diversified portfolio promising stable and recurring income. The revised target price of RM1.94 and the expected total return of 19.2% made Mah Sing a compelling buy.
