KUALA LUMPUR, Oct 16 — MIDF Amanah Investment Bank Bhd Research (MIDF Research) has maintained its “buy” call on Mah Sing Group Bhd, raising its target price to RM1.10 from 82 sen previously.

The call was made following the property company’s announcement on its glove diversification move yesterday.

In a note today, the research house expected the earnings contribution from gloves manufacturing to be more than double Mah Sing’s earnings in the financial year ending December 31, 2021 (FY2021), as Mah Sing targets to sell gloves at the spot order price, which is much higher than contractual price. 

“We estimate gloves manufacturing to contribute earnings of more than RM150 million for FY2021 based on conservative spot order price of US$60 (US$1=RM4.15) per thousand pieces against the current spot order price of US$80-US$160 per thousand pieces. 

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“In a nutshell, we are raising our FY2021 earnings forecast for Mah Sing by 152 per cent to RM266.5 million after inputting earnings contribution from gloves manufacturing,” it said.

In an exchange filing yesterday, Mah Sing said that it had proposed to diversify into the manufacturing and trading of gloves and related healthcare products.

Under the diversification proposal, its indirect wholly-owned subsidiary, Mah Sing Healthcare Sdn Bhd, will acquire 12 new glove production lines which are expected to yield an estimated total production capacity of up to 3.68 billion pieces of gloves per annum.

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At 10.40am today, May Sing emerged as the most actively traded stock on the local bourse.

Its shares jumped 19.5 sen to 92 sen per unit, with 390.60 million shares traded. — Bernama