PETALING JAYA: Cahya Mata Sarawak Bhd
’s expertise and proven track record in executing large-scale infrastructure projects will buoy the company amid trade volatility, according to MIDF Research.
The building materials manufacturer’s recent contract win of the Borneo Convention Centre Kuching II project worth RM550mil had enhanced its order book and supported earnings visibility through financial year 2028 (FY28).
The project, secured by its 51%-owned subsidiary CMS Land Sdn Bhd, will require it to undertake the design and construction of the centre located in Muara Tebas District in Kuching, Sarawak.
Construction works have already begun, and completion is expected by the first quarter of 2028.
According to the research house, Cahya Mata Sarawak’s strategic involvement in high-profile government infrastructure developments underscores its pivotal role in Sarawak’s ongoing economic and infrastructure growth.
“It has delivered consistent operating profit margins from infrastructure contracts and we expect similar stable margins for this government-backed project, as it will benefit from internal synergies and cost efficiency,” MIDF Research said.
“This reinforces our positive view on its strategic alignment with state-driven projects, providing long-term sustainability to its construction and infrastructure segments,” it added.
According to MIDF Research, the group is likely to face general industry risks such as material price fluctuations, labour availability, and potential delays.
Being a player in the building materials segment, Cahya Mata Sarawak may face challenges due to the potential influx of lower-priced Chinese construction materials, particularly cement.
“Historically shielded by relatively stable domestic pricing dynamics, local producers could face heightened pricing pressure and market share erosion due to cheaper imports.
“This development may compel the company to intensify efficiency initiatives, tighten operational cost controls, or potentially seek protective regulatory interventions to sustain competitiveness and preserve margins,” it said.
It added that even if the immediate impact is slightly negative, the group’s established market presence and integrated supply network offered resilience against these pressures.
As for Cahya Mata Sarawak’s business model, MIDF Research said its subsidiary Cahya Mata Cement Sdn Bhd provided a strong foundation for managing supply chain disruptions and material price volatility.
“Supported by a robust local supply infrastructure and efficient procurement network, the group is well-equipped to ensure timely project execution and cost control, even amid global trade-related uncertainties. These internal synergies not only mitigate execution risks but also contribute to margin stability,” it said.
MIDF Research maintained its “buy” call on the group but with a downward revised target price of RM1.11 a share from RM1.75.
