Incorporated in 1950, Malayan Cement Bhd (MCEMENT) engages in the manufacturing and sale of cement, ready-mixed concrete and other related building materials and is now positioned as one of the leading cement players in Malaysia. The group operates 5 plants located at Langkawi, Kanthan, Rawang, Padang Rengas and Bukit Sagu.
“We gather that Malaysia’s cement production delivered mild improvement to 1.7m tonnes in June 2023. Looking ahead, we reckon that production may see further improvement on the back of the acceleration of construction activities post Malaysia state elections,” said Malacca Securities in the recent Technical Focus Report.
Also, the research house reckons that MCEMENT will be able to leverage onto the upcoming Budget 2024, which they deem to be expansionary in bid to support the Malaysia economic growth.
As of 3QFY23, MCEMENT’s balance sheet remains relatively healthy with net gearing at 0.5x, implying some room to undertake further external financing for expansion activities.
“Technically, price is on the uptrend formation since the start of the year. Coming closer, price has staged a breakout-pullback-continuation pattern and has marched higher for 3 consecutive sessions,” said the research house.
For now, traders may anticipate for a potential breakout above RM3.37 to target the next resistances at RM3.50-3.60 with long term target set at RM3.80. Support is pegged at RM3.10 and cut loss is located at RM3.09.
