MAHSING: Property Developer Bolsters Landbank, Reiterates ‘Buy’ Rating

A leading investment bank has maintained its “Buy” recommendation on a prominent property developer, setting an unchanged target price of RM1.72 per share. The positive outlook is underpinned by the developer’s strategic landbanking initiatives and robust financial health, despite a recent termination of a significant industrial land deal.

Strategic Land Acquisition

The property developer recently announced its fifth land acquisition of 2025, securing a 2.79-acre leasehold parcel in Setapak, Kuala Lumpur, for RM44.5 million. This prime urban site is earmarked for “M Mira,” a new residential project with an estimated Gross Development Value (GDV) of RM300 million. Analysts view this acquisition favorably, noting its alignment with the developer’s strategy of delivering affordably priced homes in well-connected urban corridors. The purchase price, at RM366 per square foot, translates into a favorable land cost-to-GDV ratio of approximately 14.8%, significantly below the conventional 20% benchmark, implying healthy profit margins for the upcoming development. The M Mira project is strategically located with excellent connectivity to major transportation hubs and amenities, enhancing its liveability appeal. The group plans to commence pre-launch awareness activities and registration of interest in the second half of 2026.

Capital Reallocation and Outlook

In a strategic move, the developer also announced the mutual termination of a previously proposed 185-acre industrial land acquisition in Sepang. This decision, according to management, facilitates a more efficient deployment of capital towards projects offering faster execution and stronger returns, reinforcing the group’s disciplined investment approach focused on urban residential and mixed-use developments with shorter cash cycles.

Following the M Mira acquisition, the developer’s total landbank has expanded to 2,560 acres, carrying a remaining GDV of RM30.3 billion. With a healthy net gearing of 0.2x and substantial cash holdings of RM912 million as of June 2025, the company is well-positioned to pursue further strategic acquisitions, sustaining its growth momentum. The investment bank stated that its FY25-FY27 earnings forecasts remain unchanged, as the terminated Sepang industrial land acquisition had not been factored in, and M Mira’s contribution will be incorporated upon completion and finalization of development timelines. The overall outlook for the developer remains constructive, supported by its solid fundamentals, prudent landbanking strategy, and consistent sales execution, providing a strong foundation for sustained earnings visibility.