Cahya Mata Sarawak shielded from external disruptions by extensive know-how in large projects
MIDF Research said potential supply chain disruptions arising from global trade uncertainties, specifically related to the ongoing uncertainties surrounding Donald Trump's tariff policies, represent foreseeable headwinds.
"Specifically, the potential influx of lower-priced Chinese construction materials, particularly cement, could pose a strategic challenge to local cement manufacturers, such as Cahya Mata Sarawak.
"Historically shielded by relatively stable domestic pricing dynamics, local producers could face heightened pricing pressure and market share erosion due to cheaper imports.
"This development may compel this company to intensify efficiency initiatives, tighten operational cost controls, or potentially seek protective regulatory interventions to sustain competitiveness and preserve margins," it said in a note.
While the immediate impact is slightly negative, MIDF Research noted that Cahya Mata Sarawak's established market presence and integrated supply network offer some resilience against these pressures.
However, its vertically integrated business model - comprising subsidiaries such as Cahya Mata Cement, its concrete division, and the construction materials and trading arm - provides a strong foundation for managing supply chain disruptions and material price volatility.
It also said that the company is well-equipped to ensure timely project execution and cost control, even amid global trade-related uncertainties, supported by a robust local supply infrastructure and efficient procurement network.
On April 21, CMS Land Sdn Bhd received a letter of acceptance from the Sarawak government to undertake the design and construction of the Borneo Convention Centre Kuching II (BCCK II) in Muara Tebas Kuching.
Valued at RM550 million, the contract encompasses a comprehensive scope of work, including foundation, substructure, superstructure, mechanical and electrical installations, fit-out works, testing and commissioning.
Construction works commence immediately in April, with scheduled completion by the first quarter of 2028.
"This latest contract boosts Cahya Mata Sarawak's order book significantly, further improving earnings visibility over the medium term. The RM550 million award will positively impact the group's financial performance from financial year 2025 (FY25) through FY28," it added.
MIDF Research maintained a "Buy" call on the stock with a lower target price of RM1.11.
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