OSK keeps 'buy' call on Mah Sing

OSK Research is positive on the joint venture agreement between Mah Sing Group Bhd's wholly-owned unit, Grand Pavilion Development Sdn Bhd and Asie Sdn Bhd and its subsidiary, Usaha Nusantara Sdn Bhd.

In a statement today, OSK said the agreement was for the proposed joint development of prime leasehold land along Jalan Tun Razak here, measuring approximately 1.65 hectares.

"The agreement will enable Mah Sing to replenish its landbank and project pipeline as well as gain access to sizeable prime landbank in the Klang Valley,"it said.

OSK said under the agreement, Grand Pavillion also intended to undertake a niche development, M Sentral, comprising flexible-sized and more affordable serviced residences with an estimated gross development value of RM900 million.

"We think it is fair deal, considering the current market value of land in the surrounding area, as well as its strategic and prime location," it said.

It said the proposed development was expected to commence by first half 2012 and would take five years.

Under the agreement, Usaha Nusantara would grant Grand Pavilion the sole and absolute right to undertake the development of the land for RM106.6 million, to be settled 60 per cent in cash and 40 per cent by way of issuance of shares in Grand Pavillion

OSK has maintained its forecast and 'buy' recommendation on Mah Sing with an unchanged fair value of RM3.01. -- Bernama