CGSI Research believes that the ability to customise RMC products sets Malayan Cement apart from its competitors.
PETALING JAYA: Malayan Cement Bhd
’s dominant market share of the industry’s production capacity is expected to be maintained by leveraging its integrated structure, which includes a facility capable of customising ready-mix-concrete (RMC) products for industrial properties and data centres (DCs), says CGS International (CGSI) Research.
The research house, which recently visited YTL Cement’s construction development lab, believes that the ability to customise RMC products sets Malayan Cement – a listed subsidiary of YTL Cement with a 65% share of the domestic cement industry’s production capacity – apart from its competitors.
“With the lab, its RMC division has the ability to customise 35 bespoke products, equipping it to handle the rollout of DCs and industrial buildings,” CGSI Research said, adding that the company could raise prices in tandem with the rest of the industry or reduce the quantum of rebates.
Its average selling price has remained unchanged since the second quarter of 2025.
According to CGSI Research, Malayan Cement registered a 32% year-on-year increase in revenue from aggregates and concrete sales due to higher demand for RMC.
The bespoke products gave the company an edge amid strong demand from DCs and industrial buildings, which have better margins than residential projects.
The research house noted that two landmark projects using Malayan Cement’s bespoke solutions were Merdeka 118 and The Exchange 106 in Kuala Lumpur.
The company shared that to make cement usage more sustainable, the use of ordinary Portland cement has to be lowered through the incorporation of recycled products such as fly ash and clay, which lower carbon content.
“We see steady cement demand, buoyed by the government’s strong development expenditure of RM430bil from 2026 to 2030; Malayan Cement is already benefitting from the Penang LRT (light rail transit) project,” the research house said.
While CGSI Research does not see a correlation between cement production growth and gross domestic product (GDP) growth, cement production grew at an annual multiple of 2.2 to 6.4 times GDP from 2015 to 2024, or an average of 3.6 times.
The nine-year compound annual growth rate for cement production was 4%.
CGSI Research maintained an “add” call on Malayan Cement, with a higher target price of RM9 a share, up from RM7.60, on raised earnings expectations and a higher terminal growth rate of 3.5% – although lower than the average 4% seen from 2015 to 2024.
The research house pointed out that the share price has risen 21% over the past three months, bringing the valuation to a compelling 12 times 2026 price-to-earnings multiple, compared with larger peers such as Gamuda Bhd and Sunway Construction Group Bhd.
