CGS-CIMB Securities Sdn Bhd has reiterated its “Buy” call on Mah Sing Group Bhd with a revised target price (TP) of 60 sen per share.
It said Mah Sing has a solid balance sheet with a lower net gearing level versus peers at 0.3 times, to cater to its future landbank acquisitions.
“Given Mah Sing’s weaker-than-expected first-quarter (1Q) earnings of its financial year ending Dec 31, 2020 (FY20), we cut our FY20-22 forecast (F) earnings per share by 2.5 to 17% to factor in the slower progressive billings for projects.
“Our TP is rounded up to 60 sen (from 59.8 sen), based on 0.4 times FY21 F price-to-book value (P/BV) ratio,” it said in a company note.
In addition, CGS-CIMB said the property development company should benefit from the increasing focus on affordable housing by the government, and its decent dividend yield of 6-7% for FY20-22F, based on a dividend payout assumption of 40% of earnings before distribution to perpetual securities/sukuk holders.
Mah Sing’s 1Q FY20 net profit fell to RM30.07 mil from RM55.01 mil in the same period last year, while revenue declined to RM371.13 mil from RM450.33 mil previously.
Its share price on Bursa Malaysia however ended 2.5 sen better at 46.5 sen, with 1.20 million shares traded yesterday (May 29). – May 30, 2020, Bernama.
