MUI Properties on investors’ radar over growth potential of township project

MUI Properties Bhd is not a counter investors normally pay attention to. But the counter could be on their radar as it is showing signs of continued upward trajectory.

MUI Properties has been hovering at around 20 sen in the past year but saw a sudden surge of life end July 2024. It was in August that the counter touched a 52-week high of 48 sen. In the past year, MUI Properties has jumped 115%, having gone to a low of 16 sen.

The company’s debt-free balance sheet is backed by cash holdings of RM86.7 million. This translates to 11.7 sen per share which accounts for 27% of its current share price, as of end-June 2024.

In terms of price / book value rating, MUI Properties shares are presently trading at a multiple of 0.9x based on its book value per share of 48 sen as of end-Jun 2024.

It is currently trading at a PE ratio of 95.6x, which is the highest among peers. The elevated PE ratio is partly caused by a decline in earnings in the trailing 12 months.

Earnings-wise, after recording losses in the last three consecutive quarters, the company turned around with a net profit of RM7.8 million in 4QFY24, taking its FY June 2024 performance to RM3.3 million.

The company had been consistently profitable in the past 5 financial years. Net profit decreased from RM17.1 million in FYJun19 to RM7.7 million in FYJun21, but rebounded to a high of RM35.6 million in FYJun23. The increase in net profit from FYJun21 was driven by higher revenue and improved margin.

Investors are also likely to be excited over MUI Properties’ township development in Negeri Sembilan. It is the master developer of the 1,990-acre Bandar Springhill township in Negeri Sembilan. To date, 33% of the land has been developed with over 4,500 units having been built, catering to a population of 25,000.

In July this year, the developer sold a 53-acre piece of land in the township to Antmed Malaysia Sdn Bhd with the aim of building a medical equipment manufacturing factory.

Antmed Malaysia is owned by Shenzhen Antmed Co Ltd, a Shenzhen-based company that designs, develops and manufactures medical devices. The setting up of such a factory by Antmed Malaysia will lead to the establishment of a medical hub (a medical-focused manufacturing section in the industrial precinct) in the township.

This could pave the way for a medical hub to be set up within the township and would have a multiplier effect on the growth of the township.

Ultimately, the property developer would be able to register higher top-and-bottomline, eventually leading to higher share price.

“We’re very excited about this project as it will potentially launch a medical hub. It is a chance for us to build a medical hub, and with all the ancillary services and facilities to bring other medical-related manufacturers as well. That’s what we see in the future.”