KUALA LUMPUR: AmResearch estimates that Mah Sing Group Bhd's earnings to rise from RM169 million in financial year 2011 to RM209 million in financial year 2012.
The forecast also includes RM260 million earnings in financial year 2013 and RM320 million in financial year 2014.
The research house said the estimation comes along with a three-year earnings compound 24 per cent annual growth rate, anchored by in-demand landed residential developments namely, M Residence 1&2 and Southville City.
"The group's earnings are very much secured with current RM2.5 billion unbilled sales," said the research house.
AmResearch said the annual pre-sales are expected to rise to RM3.5 billion in financial year 2013 and to RM4 billion in financial year 2014.
"The net gearing is expected to rise to 0.5 with one or two more land acquisitions by year end, but this is still within a comfortable level and should be pared down by its solid cashflows," it said in a research note.
AmResearch said Mah Sing has a 40 per cent dividend payout policy now and it expects the group to pay 11 sen to 15 sen dividend per share for financial year 2012 until 2014, translating to decent yields of four to six per cent.
The research house has put a "buy" rating, with RM3.60 fair value for the initiating coverage on Mah Sing based on a mid-cycle discount to its estimated RM4.80 per share net asset value.