Mah Sing looking to issue 3Y MYR bond at 4.1% IPG

Introduction

- Mah Sing Group Berhad is an integrated property developer headquartered in Kuala Lumpur, with an established track record spanning over three decades. The group listed on Bursa Malaysia in 1992 as a plastics manufacturer before diversifying into property development in 1994, and today its portfolio spans over residential and industrial townships across the Klang Valley, Johor and Penang, alongside a manufacturing division (plastics and gloves) that provides a secondary earnings stream.

Table 1: Selected Malaysia listed residential developers

Sales momentum remains a key strength

- The group posted RM1.32 billion in property sales in 1H2026, building on a record RM2.51 billion in FY2025 property sales.

- Unbilled sales (figures from units sold - S&P signed, but not yet fully constructed or billed) stood at RM3.57 billion as at 30 June 2026, providing earnings visibility over the next 1.5 - 2 years as these convert into progress billings.

Chart 1: Mah Sing property sales trend

- The group consistently reports take up rates above 90% across its flagship affordable M Series developments. Management's strategy is to launch new phases only once existing inventory reaches healthy take-up levels, a disciplined-launch approach that help contain unsold inventory risk.

Table 2: M-series take-up rate

Table 3: Inventories level (completed properties)

Ample landbank for future developments

- Mah Sing's landbank has expanded steadily through 2026, reaching approximately 2,654 acres with RM31 billion in GDV (gross development value).

- Roughly 65% of the landbank sits in Greater KL and Klang Valley, with Johor Bahru and Penang forming the other key growth corridors (28% and 7% respectively).

Steadily growing property development segment coupled with turnaround in gloves segment

- 1H26 net profit margin expanded to 11.53% compared to FY25 due to few projects nearing completion, on top of glove division achieving a positive operating profit of RM9.7 million in 1H26, the first return to profitability since FY20.

Table 4: Total operating profit, by segment

- 2Q26 total borrowings increased to RM2.6 billion as at end-June 2026 (2025: RM2.3 billion), translating into a net debt to equity ratio of 0.39x. This is up from 0.26x at end-2025, as management taps into debts for landbank and expansion. Nonetheless, leverage ratio remains comfortable for a company in property development sector.

- Subsequently, interest coverage ratio fell slightly to 5.87 times as debt increased, but it is still very robust.

Table 5: Selected credit ratios

Credit ratings

- MARC Ratings recently assigned an AA- rating with a stable outlook to Mah Sing's RM2.0 billion Sukuk Murabahah Programme (previously unrated), with RM1.15 billion outstanding as at end-August 2026. The rating reflects the group's established track record, sustained sales momentum, healthy liquidity and moderate leverage. This is a notch lower than SP Setia rating, while being the same ratings as UEM Sunrise, Eco World and LBS Bina.

Issuance

Mah Sing is looking to issue a 3-year MYR bond at an initial price guidance (IPG) of 4.1%.

This reflects Mah Sing's newly rated status, while its credit profile is backed by sales momentum, ample landbank and moderate leverage.

Investors should note that the final yield could tighten if demand is strong at book-building.

The bond provides investors with an AA- rated exposure to a well-established Malaysian developer, at pricing broadly in line with fair value.

Declaration

For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) and the analyst who produced this report holds a NIL position in the abovementioned securities.