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Monday, February 28, 2011

MahSing - Reiterate OUTPERFORM recommendation

Mah Sing’s final results met expectations as FY10 net profit matched consensus estimates and was just 2% shy of our forecast. FY10 was an outstanding year as the group sold RM1.55bn worth of properties and bought 10 parcels of land with RM4bn GDV. This year promises to be even better as Mah Sing is eyeing landbank with GDV 2-3x that of 2010 and sales of RM2bn-2.5bn. We maintain our EPS forecasts and RM3.30 target price, based on an unchanged target P/E of 14.5x, in line with our target for the market. Potential re-rating catalysts include 1) newsflow on continued landbanking exercises, 2) sustained strong sales, and 3) accelerating earnings growth. Mah Sing remains our top pick in the property sector.

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