PETALING JAYA: The kick-off of major construction and property projects will spur demand for cement, benefitting players like Malayan Cement Bhd
(MCement), according to RHB Research.
Thus, the research firm has lifted its financial year 2024 (FY24) forecast earnings for the cement maker by 15.7% on optimism of the recent developments in regards to infrastructure and property projects.
The research house added the stock’s current valuation of 0.6 times price-to-book value is cheap when compared with the average of 0.9 times regional peers’ command.
It noted bulk cement prices continue to remain elevated, growing 1.8% month-on-month and 14.1% year-on-year to RM375.80 per tonne as of June.
Year-to-date average selling prices continue to hover around RM380 per tonne, while the three-year average of bulk cement prices for calendar year 2019-2021 is around RM216.80.
As the largest cement brand in Malaysia with 65% market share, RHB Research said MCement deserved a “buy call” as it will benefit directly from the revival of major construction and property projects.
