PETALING JAYA: Cahya Mata Sarawak Bhd
’s (CMS) planned construction of its Clinker Line 2 doubles its capacity, but any contribution towards group earnings and net asset value will only begin in financial year 2027 (FY27).
The move helps the group future-proof its capacity needs so it is in a position to support Sarawak’s industrialisation drive, said MBSB Research.
With infrastructure spending in Sarawak expected to accelerate, the research house views the group as a prime beneficiary of the state’s industrialisation agenda and regional growth story.
The Clinker Line 2 construction will double the group’s annual clinker capacity from 900,000 tonnes to 1.9 million tonnes and materially reduce reliance on imports.
The project will be financed via a combination of internal funds and external borrowings.
MBSB Research maintains its “buy” call on the stock with a higher revised target price of RM1.57 per share, pegging its FY26 earnings per share of 15.7 sen to a price-to-earnings ratio of 10 times.
It is keeping its earnings estimates unchanged, as the group’s first quarter of 2025 results and the construction of the new clinker line were within expectations.
Furthermore, CMS operates three cement grinding plants in Kuching and Bintulu, as well as distribution terminals in Sibu and Miri.
Its integrated supply chain remains well-placed to serve upcoming mega-projects such as the Sarawak–Sabah Link Road Phase 2, Trans Borneo Highway, and petrochemical-related developments in Bintulu and Samalaju.
The group recently awarded a RM673mil engineering, procurement, construction, and commissioning contract to Sinoma Industry Engineering (M) Sdn Bhd for the construction of Clinker Line 2 at its Mambong Integrated Plant in Kuching.
The approvals from the Environmental Impact Assessment and State Planning Authority have been secured, removing the final regulatory hurdle.
