KUALA LUMPUR: RHB research has turned more bullish on Mah Sing Group Bhd after a recent business update, with the firm raising its target price for the company to RM1.55 from RM1.15.
"We turn more bullish on Mah Sing, after a recent update over lunch with its senior management team."We maintain Buy on the stock with a higher target price of RM1.55 from RM1.15 previously," it added.
It said it learnt that certain parcels of Mah Sing's Southville development (316 acres) in Bangi were secured with the provision of high power supply during the upfront infrastructure stage many years ago.
"Since the location and power supply are top priorities for many industrial players. We expect some positive news flow on this to come in the second half of 2024 (2H24)," it said.
Meanwhile, RHB research said Mah Sing Business Park (MSBP) in Sepang may be the next growth catalyst for the company.Given its size of 562 acres, the firm said MSBP may comprise smaller industrial parks within the entire development - as Mah Sing's collaboration with a China party may lead to some interested parties taking up a portion of land to set up their own industrial cluster.
"We think this is timely, as 2024 also marks the 50th anniversary of the establishment of diplomatic relations between Malaysia and China."New land may provide further upside to our realised net asset value (RNAV) estimate."The company's net gearing of only 0.08 times also gives it ample capacity to gear up if strategic opportunities arise," it said.
On Mah Sing's glove manufacturing business, RHB Research said high-quality niche products as well as cost efficiency should accelerate the turnaround of Mah Sing's glove manufacturing business.
Management indicated that as soon as average selling price (ASP) recovers to over US$16.50/1k pieces, this segment should undergo a more sustainable earnings recovery. Ends
