CIMB Investment Bank Bhd (CIMB Securities) has highlighted Cahya Mata Sarawak Bhd (CMS) as a direct beneficiary of Sarawak’s infrastructure-led development under the state’s Post-COVID-19 Development Strategy (PCDS) 2030, supported by its integrated cement operations and diversified business segments. Although the research house did not assign a rating, it noted that CMS’s earnings re-rating is likely, given its improving earnings prospects and strong balance sheet.
CIMB Securities said CMS remains Sarawak’s only fully integrated cement producer and a crucial supplier of construction materials, serving as the industrial backbone for the state’s infrastructure growth. Beyond cement, the group has operations in road maintenance, property development, oil and gas services, and phosphate production. Its road maintenance division currently manages over 3,300km of roads through long-term concessions, while its property arm controls more than 4,400 acres of land across the state.
With an annual grinding capacity of 2.8 million tonnes, CMS is positioned to ensure stable cement supply across Sarawak. Its clinker capacity, currently at 0.9 million tonnes per annum, will more than double to 1.9 million tonnes once its RM673 million second clinker line begins operations in 2027. The expansion is expected to enhance efficiency, reduce reliance on imported clinker, and better meet Sarawak’s rising cement demand, projected at 1.7 million tonnes in 2024.
On its phosphate venture, CIMB Securities noted that CMS’s 80%-owned Cahya Mata Phosphate Industries (CMPI) has regained power supply at its Samalaju plant as of September 9, 2025, allowing testing and commissioning to proceed despite ongoing arbitration with Sarawak Energy. While CMPI reported RM87 million in pre-tax losses in the first half of 2025 compared to RM40 million a year earlier, full operations by the first half of 2026 could generate RM800 million to RM1 billion in annual revenue, translating into RM80 million to RM100 million in net profit at around a 10% margin.
Following a softer first half of 2025, with core net profit of RM56 million down 28% year-on-year, CMS is targeting a stronger second half, driven by higher construction activity and progressive billings from the RM550 million Borneo Convention Centre Kuching II project. The stock currently trades at undemanding forward P/E multiples of 8.5x for FY2025 and 7.7x for FY2026, representing a 29% to 41% discount to peers and at 0.4x price-to-book value, which implies a 63% discount to its RM3.14 book value per share.
CIMB Securities added that CMS’s RM370 million net cash position, equivalent to 30% of its market capitalisation, supports its expansion plans. Key catalysts for the company include stronger state-led infrastructure spending and the commercialisation of its new clinker and phosphate plants, though execution risks in the latter remain a concern.
At 10.16 am, Cahya Mata Sarawak’s stock price rose near 10% to RM1.260.
