MAHSING: Strategic Penang Land Acquisition Bolsters Future Growth, ‘Buy’ Rating Affirmed
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
TA Securities has highlighted a strategic move by a prominent property developer through a significant land acquisition in Penang, poised to enhance its presence and future earnings. The investment bank maintains a “Buy” recommendation for the company, setting a target price of RM0.25, which represents a 25.0% upside from the last traded price of RM0.20.
Key Acquisition Details
The company, via its wholly-owned subsidiary Enchanting View Development Sdn Bhd, has entered into a Sale and Purchase Agreement to acquire 2.83 acres of leasehold land in George Town, Penang. The total purchase consideration for this prime urban site amounts to RM51.8 million, translating to RM420 per square foot. This acquisition marks the company’s fourth land deal in 2025, solidifying its commitment to strengthening its presence in the highly sought-after Penang island market.
Financial Prudence and Strategic Advantages
A key aspect of this deal is its deferred payment structure, spanning over 36 months. This carefully planned payment schedule, comprising an initial 20% deposit followed by installments of 15%, 15%, and 50% at 12-, 24-, and 36-month intervals, enables the company to optimise cash-flow management and preserve financial flexibility for ongoing developments and future landbanking opportunities. Furthermore, the land cost-to-Gross Development Value (GDV) ratio of 9.8% is notably below the industry’s standard 20% rule, indicating a financially sound and reasonable acquisition price. This strategic financial planning underscores the company’s prudent approach to capital deployment and its ability to secure value-accretive assets.
Projected Development and Future Outlook
The newly acquired land, strategically located with excellent connectivity and proximity to key amenities, is slated for a mixed development tentatively named “M Cora.” This project is projected to generate an estimated Gross Development Value (GDV) of RM528 million. “M Cora” is planned to offer two-bedroom condominiums and commercial suites, targeting a broad range of buyers including young professionals, first-time homeowners, and investors, with indicative prices starting from RM426,000.
Management plans to initiate pre-launch awareness activities and registration of interest for “M Cora” in the second half of 2026, with the transaction expected to conclude by 2H2028. This acquisition will increase the company’s total landbank to 2,557 acres, carrying a substantial remaining GDV of RM30.0 billion, ensuring a robust pipeline for future earnings. The company’s healthy balance sheet, marked by a net gearing of 0.2x and RM912 million in cash as of June 2025, positions it well to pursue further strategic landbanking opportunities. TA Securities maintains a constructive outlook, supported by the company’s solid fundamentals, prudent landbanking strategy, and consistent sales execution, providing a strong foundation for sustained earnings visibility.
