The research house said in a note that CMS is set to benefit from the Pan-Borneo Highway Sarawak projects and the state development budget.
Cement demand is expected to rise higher on the back of the Pan-Borneo Highway Sarawak project – of which progress is still at about 35%.
"In addition, the commencement of the Sarawak Highway and Second Trunk Road projects as well as the new Baleh Dam project in 2020-2021 also bodes well for the group," said RHB.
It added that CMS is the sole supplier of cement in Sarawak with a total capacity of 2.75 million tonnes per annum, currently running at 60% capacity.
Meanwhile, CMS yesterday announced that the PPES Works-CCCC joint venture had secured a RM466.7mil contract to secure a bridge crossing in Bintulu.
PPES Works has a 70% stake in the JV. It is in turn 51% owned by CMS, giving the latter a 35.7% stake in the contract.
"The bridge, crossing Batang Kemena at Bintulu-Jepak, is approximately 1km long, with four lanes.
"The double carriageway cable-stayed bridge will come complete with a flyover over the Jalan Tun Ahmad Zaidi-Jalan Tun Razak-Jalan Abang Galau traffic junction, with a connecting road spanning approximately 4km," said RHB.
The contract will be for a period of four years from April 3, 2019 to April 2, 2023.
"With the contract running four years until April 2023, we increase our FY19-21F earnings by 1%/2%/1%," said RHB.
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