KUALA LUMPUR: CIMB Securities Sdn Bhd projects Malaysia’s building materials sector’s core earnings will rise to 68 per cent in 2026, up sharply from a forecasted 15 per cent in 2025, before moderating to 16 per cent in 2027.
The rebound is expected to be led by Ann Joo Resources Bhd
’s return to profitability in financial year 2026, supported by growing traction in downstream value-added steel products, green steel initiatives in Singapore, and electrification projects.
Malayan Cement Bhd is also set to benefit from improved cost efficiencies and market share gains, CIMB Securities said in a note today.
"Further support will come from a revival in domestic infrastructure spending from the first half of 2026/2027 under the 13th Malaysia Plan (13MP), as well as the rollout of hyperscale data centres and industrial developments, which should boost order flows for cement and steel,” it said.
The firm noted that a recent 15-40 per cent rise in haulage fees and quarry product prices has created sector-wide structural cost pressures, sustaining elevated prices for key building material inputs.
This follows the introduction of new overloading regulations in mid-October 2025, which have directly passed through costs in the cement sector.
"We also expect steel players to pass on incremental logistics cost increases, given thin margins amid soft global steel prices,” it added.
CIMB Securities reaffirmed Malayan Cement as its top pick, citing its robust logistics network and market leadership, which benefits from inelastic demand in the cement sector.
"Although steel demand is expected to improve with fresh projects under the 13MP, we maintain a ‘hold’ rating on Ann Joo Resources due to weak domestic steel margins and the planned introduction of a carbon tax in 2026,” it added. - Bernama
