Maintain NEUTRAL. Mah Sing Group Berhad KINDLY REFER TO THE LAST PAGE OF THIS PUBLICATION FOR IMPORTANT DISCLOSURES. Focus on Klang Valley development

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1 04 July 2017 Corporate Update Mah Sing Group Berhad Focus on Klang Valley development INVESTMENT HIGHLIGHTS Acquired Cheras KL and Bukit Mertajam Penang land Terminated the acquisition of Shah Alam Golf Course land Sold 51% equity interest in Kota Kinabalu Convention City Neutral on the news Earnings estimate maintained Maintain NEUTRAL with TP of RM1.59 Maintain NEUTRAL Adjusted Target Price: RM1.59 (Previously RM1.62) RETURN STATS Price (3 rd July 2017) Target Price Expected Share Price Return RM1.57 RM % Expected Dividend Yield +3.7% Expected Total Return +4.9% Acquired Cheras KL and Bukit Mertajam Penang land. Mah Sing Group Berhad (MAHSING) has announced its proposal to buy acres of 99-years leasehold land in Cheras, KL (at Batu 2.5 Jalan Cheras) for RM263m. It has also acquired a acres of freehold development land in Bukit Mertajam, Pulau Pinang for RM43.8m. Refer Page 2 for the details for of these land deals. Terminated the acquisition of Shah Alam Golf Course land. MAHSING and the vendor of acres of land in Sultan Salahuddin Abdul Aziz Shah (KGSSAAS) Golf Course, Selangor has mutually agreed to terminate the sales and purchase agreement. Sold 51% equity interest in Kota Kinabalu Convention City. MAHSING sold its 51% equity interest in Convention City Development Sdn Bhd (Convention City) to Diverse Capital Sdn Bhd (DCSB) for RM6.6m. Neutral on the news as the impact to RNAV is limited. On the positive side, management focus on the Klang Valley and affordable projects should bode well for sales and earnings in the near term. Earnings estimate maintained. We maintain our earnings estimate for both FY17 and FY18. The contribution from Cheras KL and Bukit Mertajam Penang land are neutralised by the termination of projects from Shah Alam and Kota Kinabalu. Maintain NEUTRAL with TP of RM1.59 based on discount to RNAV of 25%. Our TP is lowered by RM0.03 after updating our RNAV to reflect the land deals above. Despite the reduction in TP, the stock is supported by its decent dividend of 4.1%. STOCK INFO KLCI Bursa / Bloomberg 8583 / MSGB MK Board / Sector Main / Properties Syariah Compliant Yes Issued shares (mil) Market cap. (RM m) 3, Price over NA wk price Range RM RM1.7 Beta (against KLCI) mth Avg Daily Vol 1.60m 3-mth Avg Daily Value RM2.45m Major Shareholders Mayang Teratai S/B 27.10% EPF 8.86% Mayang Teratai Limited 7.47% Bank of Singapore 7.47% Lembaga Tabung Haji 5.81% KWAP 5.05% KINDLY REFER TO THE LAST PAGE OF THIS PUBLICATION FOR IMPORTANT DISCLOSURES

2 INVESTMENT STATISTICS FYE Dec (RM m, unless otherwise stated) FY14A FY15A FY16A FY17F FY18F Revenue EBIT PBT Net Income Core Net Income EPS (sen) Core EPS (sen) Net DPS (sen) Net Dvd Yield 4.1% 4.1% 4.1% 3.7% 3.9% PER NTA/share (RM) P/NTA ROE 15.6% 11.4% 11.3% 10.7% 10.5% ROA 6.7% 5.4% 6.0% 5.8% 5.9% Source: Company, MIDF Research Forecast Acquiring Cheras land for RM263m. MAHSING has entered into agreement to acquire acres of 99-years leasehold land in Cheras, KL (at Batu 2.5 Jalan Cheras). We gather that MAHSING plans an integrated development with indicative price from RM450,000 per unit with built ups of 850sqft and 1,000 sqft. Potential total GDV of the project is up to RM2.20b. Land price is fair based on land cost to GDV ratio of 12% which is within the range of recent land deals. The land is located 1.8km away from the Sunway Velocity Mall and is also only 600m from Maluri MRT and LRT Interchange and Taman Pertama MRT Station is only 800m away. Buys Bukit Mertajam land too for RM43.8m. The Company also acquired a acres of freehold development land in Bukit Mertajam, Pulau Pinang for RM43.8m. We gather that MAHSING plans to build shop offices and factories with proposed GDV of RM150m. The land is 3km to the north-west of Simpang Ampat town and it is close to established industrial parks such as Bukit Minyak Industrial Park and Permatang Tinggi Industrial Park. Terminated the acquisition of Shah Alam Golf Course land. MAHSING and the vendor of acres of land in Sultan Salahuddin Abdul Aziz Shah (KGSSAAS) Golf Course, Selangor has mutually agreed to terminate the sales and purchase agreement. We gather that the land conversion approval and consent to transfer were not fulfilled. The Company believes that the termination will allow it to focus on affordably priced products (against high end products). Sold its 51% equity interest in Kota Kinabalu Convention City. MAHSING sold its 51% equity interest in Convention City Development Sdn Bhd (Convention City) to Diverse Capital Sdn Bhd (DCSB) for a total of RM6.6m. The Company believes that the sale allows it to refocus on Klang Valley and Greater KL. 2

3 DAILY PRICE CHART Alan Lim, CFA Source: MIDFR, Company RNAV Landbank Location Size (Ac) Size (Sq ft) Book Value (RM m) Implied BV Valuation (RM/sqft) Price (RM/sqft) Stake Valu e (RM m) Johor Sierra Perdana Plentong, Johor Bahru, Johor ,602, % Sri Pulai Perdana Pulai, Johor Bahru, Johor ,309, % 64.7 Austin Perdana Tebrau, Johor Bahru, Johor ,212, % 36.9 Kangkar Pulai, Kulaijaya, Sri Pulai Perdana 2 Johor , % 24.2 Mah Sing i-parc Tg. Kupang, Johor Bahru, Johor ,746, % Bandar Meridin East Iskandar Malaysia, Johor ,884, % Medini Iskandar Malaysia, Johor NA DCF Kuala Lumpur/Selangor Star Avenue Subang, Selangor NA DCF 15.1 Icon Residence Mont' Kiara, Kuala Lumpur NA DCF 20.5 Garden Plaza Cyberjaya NA DCF 17.8 Jalan Ampang, Kuala M City Lumpur NA DCF M Vertica Cheras, Kuala Lumpur 11.2 DCF Star Residence Subang, Selangor , % 27.4 Mah Sing Integrated Industrial Park Shah Alam, Selangor , % 7.3 Aman Perdana Kapar, Klang, Selangor ,353, % 61.2 Hijauan Residence & Bayu Cheras, Hulu Langat, Sekamat Selangor ,089, % 78.7 Garden Residence Cyberjaya , % Perdana Residence 2 Selayang, Selangor , %

4 PJ Commercial Hub SS9, Petaling Jaya, Selangor , % Kinrara Residence Bandar Kinrara, Selangor , % M Rawang Rawang, Selangor ,435, % M Residence 2@ Rawang Rawang, Selangor ,856, % Southville City Dengkil, Sepang, Selangor ,506, % Damansara Sentral Damansara, Selangor , % Lakeville Residence Batu, Kuala Lumpur , % M Residence 3@ Rawang Rawang, Selangor ,212, % Penang Southbay Penang Southwest Penang ,132, % Icon Residence, Penang Georgetown, Penang , % 51.5 Ferringhi Residence, Penang Batu Ferringhi, Penang ,027, % Southbay Southwest Penang 7.0 DCF 17.2 Batu Mertajam Mainland Penang 10.9 DCF 16.3 Sabah Sutera Avenue Kota Kinabalu, Sabah , % 47.8 Recently Acquired Landbank Titiwangsa Land Kuala Lumpur , % 62.0 Sentul Land Kuala Lumpur , % 86.6 Total Landbank Value Fixed Assets Investment Properties Cash Total Liabilities (excl. deferred tax & construction related payables) Total RNAV No of shares (m) RNAV per share Warrants (Old), Exercise Price RM Warrants (New), Exercise Price RM Fully Diluted No Of Shares FD RNAV Per Share 2.12 Discount 25% Target Price

5 MIDF RESEARCH is part of MIDF Amanah Investment Bank Berhad ( X). (Bank Pelaburan) (A Participating Organisation of Bursa Malaysia Securities Berhad) DISCLOSURES AND DISCLAIMER This report has been prepared by MIDF AMANAH INVESTMENT BANK BERHAD (23878-X). It is for distribution only under such circumstances as may be permitted by applicable law. Readers should be fully aware that this report is for information purposes only. The opinions contained in this report are based on information obtained or derived from sources that we believe are reliable. MIDF AMANAH INVESTMENT BANK BERHAD makes no representation or warranty, expressed or implied, as to the accuracy, completeness or reliability of the information contained therein and it should not be relied upon as such. This report is not, and should not be construed as, an offer to buy or sell any securities or other financial instruments. The analysis contained herein is based on numerous assumptions. Different assumptions could result in materially different results. All opinions and estimates are subject to change without notice. The research analysts will initiate, update and cease coverage solely at the discretion of MIDF AMANAH INVESTMENT BANK BERHAD. The directors, employees and representatives of MIDF AMANAH INVESTMENT BANK BERHAD may have interest in any of the securities mentioned and may benefit from the information herein. Members of the MIDF Group and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein This document may not be reproduced, distributed or published in any form or for any purpose. MIDF AMANAH INVESTMENT BANK : GUIDE TO RECOMMENDATIONS STOCK RECOMMENDATIONS BUY TRADING BUY NEUTRAL SELL TRADING SELL Total return is expected to be >15% over the next 12 months. Stock price is expected to rise by >15% within 3-months after a Trading Buy rating has been assigned due to positive newsflow. Total return is expected to be between -15% and +15% over the next 12 months. Negative total return is expected to be -15% over the next 12 months. Stock price is expected to fall by >15% within 3-months after a Trading Sell rating has been assigned due to negative newsflow. SECTOR RECOMMENDATIONS POSITIVE NEUTRAL NEGATIVE The sector is expected to outperform the overall market over the next 12 months. The sector is to perform in line with the overall market over the next 12 months. The sector is expected to underperform the overall market over the next 12 months. 5