By Farah Wahida:
Although they failed to meet expectations in 2012, some residential property stocks are expected to perform better this year, according to UBS Investment Research.
Among them the best is Mah Sing Bhd thanks to its good management and ambitious plan to expand within Malaysia. Due to its diverse product range, the company’s sales and earnings are expected to grow by 20 percent this year.
“Our new price target for Mah Sing’s stock is RM2.80 based on a 30 percent discount in realisable net asset value (RNAV) of RM3.99 and the company has a dividend policy of paying a minimum 40 percent of net profit resulting in a forecast yield of 6.2 percent for 2013,” said the research unit.
Meanwhile, UBS gave a ‘buy’ rating on SP Setia, whose shares are currently being traded at 14.3 times the expected FY2013 price-to-earnings ratio, with yield at 4.1 percent.
“The stock is currently traded at a 38 percent discount to our RNAV of RM5.14.”
“This discount more than fairly reflects the risks associated with the departure of Chief Executive Officer Tan Sri Liew Kee Sin, diversification of projects outside of Malaysia and upcoming product launches from its high-quality landbank should ensure that the company achieves its aggressive sales target for financial year 2013.”
Furthermore, the sales of luxury properties in Malaysia were slow, while those of low- to medium-cost units (RM500,000 to RM1 million) were resilient. In addition, demand for premium condominiums and premium landed properties were weaker, noted UBS.
Although they failed to meet expectations in 2012, some residential property stocks are expected to perform better this year, according to UBS Investment Research.
Among them the best is Mah Sing Bhd thanks to its good management and ambitious plan to expand within Malaysia. Due to its diverse product range, the company’s sales and earnings are expected to grow by 20 percent this year.
“Our new price target for Mah Sing’s stock is RM2.80 based on a 30 percent discount in realisable net asset value (RNAV) of RM3.99 and the company has a dividend policy of paying a minimum 40 percent of net profit resulting in a forecast yield of 6.2 percent for 2013,” said the research unit.
Meanwhile, UBS gave a ‘buy’ rating on SP Setia, whose shares are currently being traded at 14.3 times the expected FY2013 price-to-earnings ratio, with yield at 4.1 percent.
“The stock is currently traded at a 38 percent discount to our RNAV of RM5.14.”
“This discount more than fairly reflects the risks associated with the departure of Chief Executive Officer Tan Sri Liew Kee Sin, diversification of projects outside of Malaysia and upcoming product launches from its high-quality landbank should ensure that the company achieves its aggressive sales target for financial year 2013.”
Furthermore, the sales of luxury properties in Malaysia were slow, while those of low- to medium-cost units (RM500,000 to RM1 million) were resilient. In addition, demand for premium condominiums and premium landed properties were weaker, noted UBS.
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