KUALA LUMPUR: RHB Research has maintained its Buy call on Cahya Mata Sarawak (CMS) with a fair value of RM10.37 as it is the best proxy to the Sarawak Corridor of Renewable Energy (Score).
In a note on Wednesday, RHB said while CMS’ share price has almost tripled barely a year since its initiated coverage, it still sees room for upside given its robust growth potential.
RHB said American investors were attracted by the attractive power tariffs offered to heavy industries in Samalaju, Sarawak.
“Construction on Phase 1 of a power-hungry smelting project by the group’s 20%-owned OM Materials (Sarawak) (OMS) is now in the final stages, with stage commissioning expected from July this year.
“Positive progress is also seen in its Malaysian Phosphate Additives SB (MPA) project, while there is potential upside for 51%-owned Samalaju Property Development SB (SPD).
“While occupancy rates at its workers lodge may drop, the scale of works at its hotel, amenities, and residential and commercial properties may be larger than we projected earlier,” it said.
RHB said many investors were also impressed with the group’s logistics prowess, which allows it to maintain its tight grip on Sarawak’s cement market.