PETALING JAYA: Expectations of stronger earnings momentum and sustained demand growth are shaping a constructive outlook for Malayan Cement Bhd
, as changes in its shareholding structure improve market liquidity and support valuation rerating prospects.
The cement producer’s near-term trajectory is increasingly tied to infrastructure-led demand recovery, easing cost pressures and clearer compliance with public shareholding requirements following a selldown by its controlling shareholder.
CIMB Research appeared optimistic that these factors would underpin earnings visibility and investor interest over the medium term.
Malayan Cement announced that YTL Cement Bhd had sold 82.4 million shares, representing a 5.95% stake, confirming media reports of a potential secondary placement of up to 100 million shares, or a 7.2% stake.
Based on an indicative price of RM7.55 per share, the transaction implies a 2.9% discount to the one-day volume-weighted average price and a 3.6% discount to the five-day volume-weighted average price.
Commenting on the move, CIMB Research said: “The placement is a constructive move towards ensuring adequate buffers above Bursa Malaysia’s minimum public shareholding spread of 25%.”
Malayan Cement’s free float reportedly stood at approximately 29% as of Jan 16, according to Bloomberg data, with YTL Cement holding 59.3% following the sale.
The placement therefore would reduce concerns over thin liquidity while keeping the controlling shareholder firmly in place.
Against this backdrop, CIMB Research upgraded its valuation assumptions and reiterated a positive stance on the stock.
“We reiterate our ‘buy’ call with a higher sum-of-parts-based target price of RM8.30 (from RM7.50), implying an estimated price-to-book-value of 1.4 times for the financial year ending June 30, 2027 (FY27),” it said.
Earnings expectations were also lifted, with FY26 to FY27 core net profit forecasts having revised up by 4% to 6% while projection for FY28 is unchanged, supported by elevated industry pricing, easing coal costs and Malayan Cement’s extensive supply chain.
Meanwhile, one industry source said the YTL Cement’s selldown has brought Malayan Cement back into focus, as improved free float and liquidity tend to attract broader institutional participation.
“With shareholding concerns easing, attention is now turning to how Malayan Cement can leverage upcoming infrastructure works to sustain volume growth,” he explained.
Overall, industry conditions remain supportive of Malayan Cement’s prospects, particularly as public sector spending gains traction.
“Beyond the phased rollout of the 13th Malaysia Plan spending (RM430bil; covers 2026-2030), we expect Malayan Cement to capitalise on renewed infrastructure activity ahead of the Johor and Malacca state elections,” CIMB Research added.
It noted that in Johor, the proposed RM7bil Johor elevated autonomous rapid transit system is seen as critical to easing traffic within Johor Baru, complementing the scheduled commencement of the Johor Baru-Singapore Rapid Transit System Link in early 2027, while longer-term projects such as Rapid Transit System Link 2 and the Kuala Lumpur-Singapore high-speed rail could be revisited.
Cross-border spillover demand may also emerge from Singapore’s major developments, including the S$13bil Changi Terminal 5 expansion and the S$10bil Marina Bay Sands upgrade.
On the cost front, CIMB Research noted that benchmark coal prices had fallen 13% in the second half of 2025 (2H25) versus 1H25 and remained subdued quarter-on-quarter, supporting sustained profit momentum given the bumper earnings in the first quarter of FY26, with cement demand projected to grow 3.8% to 4.6% over FY26 to FY28.
