Penang venture boosts Mah Sing


PETALING JAYA: Mah Sing Group Bhd’s stock surged 19 sen, or 3.83%, to RM5.15 yesterday on positive sentiments that its Penang venture will further boost its earnings and enhance its growth prospects.

An Aseambankers analyst said although Mah Sing was making its debut in Penang, its good track record in the Klang Valley would allow it to perform well on the island.

“A good performance is ensured if it can come up with a concept that is refreshing to the buyers,” he told StarBiz yesterday.

On Wednesday, Mah Sing announced it would purchase freehold land totalling 35.1ha in Batu Maung, Penang, for RM115.7mil.

The estimated gross development value for its project, Southbay Penang, is RM1.28bil.

It was reported that Southbay would consist of commercial and residential components, and expected to be completed in five to seven years.

The analyst said assuming the Penang project would reap an average 30% pre-tax profit margin, Mah Sing’s net profit could be boosted by RM25mil yearly for the next eight years.

The research house, which has a “buy” call on this stock, has forecast Mah Sing’s net profit for 2008 and 2009 to be RM94.9mil and RM117.9mil respectively.

The analyst also said unlike its other developments, Mah Sing would work with a local partner in the Penang project, but maintain substantial control with a 70% stake.

He added that the property player would be able to attract more participants to the Malaysia My Second Home programme, as Penang was known to be a popular spot for the programme.

OSK Research was also optimistic on Mah Sing’s growth prospects in Penang, as the group was known for its quality landbank and efficiency in asset management, which were driving its strong earnings growth.

An analyst said Mah Sing would probably target the foreign market, particularly East Asia, for its project in Penang.

He said Penang was a hotspot, with land prices appreciating fairly quickly, resulting in many property companies targeting the high-end markets.

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