Positive mid-to-long-term outlook for Mah Sing

Analysts remain positive on the mid-to-long-term outlook for Mah Sing Group Bhd for the financial year 2021 (FY21), on the back of strong sales achieved in the last few quarters.

Despite the on-going Covid-19 pandemic, the property developer continues to focus on its quick turnaround business model that launches new projects swiftly and offers a potential upside of over 50 per cent at its current share price.

In addition, the property-turned glovemaker will also start its glove production business soon, and this is expected to contribute positively to its FY21’s earnings and beyond.

AmInvestment Bank Research said Mah Sing, which has lined up several launches for this year has indicated that more than 75 per cent of them would be in the affordable segment.

In the central region, Mah Sing will roll out the remaining phases of M Arisa Sentul service apartments; M Vertica, Cheras Tower E serviced apartments; Southville City, Bangi Cerrado Tower C serviced apartments; Sensa Tower B serviced apartments as well as M Aruna and M Residence, Rawang link-homes,” it said in a research note today.

The group will also launch the Southbay City serviced apartments in Penang and Meridin East link-homes in Johor.

On the glove manufacturing side, Mah Sing expects it to commence production in April 2021.

The developer announced its venture into the rubber glove business last October and its intention to build 12 production lines with an estimated total production capacity of up to 3.68 billion pieces of gloves per annum.

The research house said in a note that it believes demand for gloves would remain stable post-Covid-19 due to heightened awareness and more stringent regulations.

“We reckon that the average selling price (ASP) would decline after 2021 as there is no longer a rush for gloves compared to what happened at the beginning of the pandemic,” it said.

“Hence, we cut our FY22 net profit forecast (for Mah Sing) by 34 per cent to reflect the lower ASP of gloves to US$30 per 1,000 pieces from US$40 per 1,000 pieces while making no changes to our FY20-FY21 numbers,” it said.

Source: NST