• Maintain BUY and MYR0.98 TP, 17% upside with 4% FY23F yield. MahSing’s 3Q23 results are within expectations. The company is likely tosurpass its MYR2.2bn sales target by the year-end, as its 9M23 salesalready hit MYR1.8bn. We expect management to ramp up landbankingactivities soon, given its low net gearing and the popularity of its M-seriesprojects. We also look forward to management’s effort to expand itsindustrial development portfolio, as the collaboration with China playersshould provide some visibility on potential demand.

• 3Q23 results review. 3Q23 revenue and earnings were largely flat QoQ.While revenue and EBIT for the property development segment were ratherconsistent QoQ, the manufacturing division finally turned EBIT-positive(+MYR2.4m vs -MYR4.16m in 2Q23) since the set-up of its glove-makingbusiness two years ago – mainly because of the plastics division chalkingmuch stronger earnings. Meanwhile, its unsold completed inventory fell toMYR537.1m from MYR579.3m in 2Q23. Net gearing was only at 0.13x (vs0.12x in 2Q23). Management guided that the ASP for gloves is in line withthe current industry trend, but volume is expected to gradually pick up in thecoming quarters.

• Consistent trend in new sales. New property sales reached MYR600m,similar to the MYR600.4m recorded in 2Q23. 9M23 property sales ofMYR1.8bn was largely contributed by M Astra (MYR469m), M Vertica(MYR219m), Meridin East (MYR309m), M Nova (MYR173m) and MSenyum (MYR167m). The company’s M-series projects have done well sofar. All the non-bumiputera units in Tower A of M Minori in Johor were fullytaken up upon its launch recently, and Tower B unit sales will be rolled outsoon.

• Expect active landbanking ahead. Management is currently on thelookout for new land to add, specifically for township and industrialdevelopments as well as M-series projects. Such projects would be inJohor, the Klang Valley and Penang. Prospects for industrial propertydemand is encouraging as well, as this segment has received much interestvia its collaboration with some China corporations that plan to set up theirmanufacturing bases in Malaysia.

• Forecast. We make no changes to our earnings forecasts. Unbilled salesincreased to MYR2.42bn in 3Q23 vs MYR2.34bn as at 2Q23.

• Maintain TP. Our SOP-based TP includes a 55% discount to RNAV, with a0% ESG discount/premium applied, as our ESG score of 3 out of 4 for thecompany is in line with the country median.

Source: RHB Securities Research - 30 Nov 2023