malaysiang
KUALA LUMPUR, Research houses have reiterated their ‘buy’ call on Mah Sing Group Bhd after the company signed a second collaboration agreement with Bridge Data Centres Malaysia VII (BDC) for the joint development of data centres (DCs).
In a research note today, CIMB Securities Sdn Bhd said the latest partnership builds on the initial agreement signed between the parties in May 2024 to co-develop 100 megawatts (MW) of power capacity for a DC facility within a 7.28-hectare site (plot 2).
It said this will expand total power capacity at the DC hub to 300 MW and when fully commissioned, it will be able support up to 590 MW of power capacity.
CIMB Securities said the latest agreement offers Mah Sing dual benefits, namely profits from land disposals and future recurring income streams when the DC facility commences operations.
‘We estimate that Mah Sing will receive RM433 million from selling the three land parcels at the DC hub (plot 2, plot 3A, and plot 3B),’ it said.
It also said that based on a 30 per cent
stake in the joint venture with BDC, the total investment outlay is projected to be RM7.5 billion.
Thus, CIMB Securities maintained its ‘buy’ recommendation on Mah Sing with an unchanged target price (TP) of RM2.10.
Meanwhile, MIDF Amanah Investment Bank Bhd maintained a ‘buy’ call with a revised TP of RM2.01.
‘We revise our TP for Mah Sing to RM2.01 from RM1.97 as we narrow revised assets market value discount to 13 per cent from 15 per cent in view of better earnings visibility from the data centre venture,’ it said in a separate note.
Additionally, Mah Sing has 17.21 hectares of land in Meridin East, which is also suitable for data centre development.
‘MIDF remains positive on Mah Sing as new sales prospects will be supported by strong buying interest on affordable residential projects,’ it added.
RHB Investment Bank Bhd also maintained a ‘buy’ call, with a new TP of RM2.70 from RM2.26, a 52 per cent upside and a three per cent yield.
‘We view Mah Sing’s second collaboration with BDC positively. Alt
hough the company has yet to announce the off-taker for the first 100 MW signed in May this year, BDC’s demand for another 14.57 hectares and an additional 200 MW suggests its strong confidence in filling up the capacity,’ it said separately.
Besides, earnings forecast for the financial year 2025 (FY2025) would see a quantum leap, boosted by land disposal gain to the joint venture while FY2026 earnings forecast would see the maiden contribution from BDC’s first 100 MW (plot 2).
At 10.57 am, Mah Sing shares were down three sen to RM1.74, with 5.52 million shares traded.
Source: BERNAMA News Agency
