PETALING JAYA: Cement demand is expected to gradually strengthen over the medium term as major infrastructure projects gather pace, underpinning Malayan Cement Bhd
’s earnings outlook despite recent share price weakness.
CGS International (CGSI) Research expects demand to improve once key projects such as the Penang Light Rail Transit Mutiara Line, Johor Elevated Autonomous Rapid Transit (E-Art) system and several large water infrastructure projects move into more meaningful stages of construction.
It retained its “add” recommendation and target price of RM10.10 per share on Malayan Cement, noting that the stock’s recent correction does not reflect improving earnings prospects.
“We see a clear disconnect between Bloomberg consensus financial year 2026 (FY26) to FY27 earnings per share forecasts, which have been raised by 27% to 37% since January 2026, and its share price, which has corrected by 11% over the past one month,” the research house said.
It noted the stock is currently trading at 8.6 times 2027 price-to-earnings, about one standard deviation below its historical mean valuation of 12.5 times.
Following a recent meeting with management, CGSI Research said demand for the group’s traditional cement products remained steady, while ready-mixed concrete (RMC) and export businesses are emerging as key growth drivers.
The research house expects RMC revenue to grow between 15% and 26% annually over FY26 to FY28, driven by higher selling prices and volumes, with the segment’s contribution rising to between 31% and 43% of total group revenue.
It said demand has been supported by Malayan Cement’s portfolio of 35 customised concrete products, particularly for data centre developments using industrialised building systems.
Meanwhile, the group’s Langkawi cement plant has been receiving stronger export enquiries from markets such as Singapore, where cement demand is expected to rise as major developments, including Changi Airport Terminal 5, progress.
