Cahya Mata Sarawak shares hit six-week high after surge in profits

• For the fourth quarter ended Dec 31, 2024 (4QFY2024), the group’s net profit soared 85.04% year-on-year (y-o-y) to RM65.8 million — its strongest quarterly performance since 3QFY2022 — driven by improvements across business segments and higher other income.

KUALA LUMPUR (Feb 19): Shares of Cahya Mata Sarawak Bhd (KL:CMSB) rose to their highest in six weeks on Wednesday after the construction and building materials company reported a surge in quarterly profits.

Cahya Mata climbed as much as 16% to RM1.16, its highest since Jan 8, 2025. The stock was trading at RM1.12 at 9.15am, giving the company a market capitalisation of RM1.2 billion. Trading volume totalled nearly five million shares so far.

For the fourth quarter ended Dec 31, 2024 (4QFY2024), the group’s net profit soared 85.04% year-on-year (y-o-y) to RM65.8 million — its strongest quarterly performance since 3QFY2022 — driven by improvements across business segments and higher other income.

Meanwhile, revenue edged up 2.46% y-o-y to RM340.99 million, marking its highest level since 3QFY2020, when revenue came in at RM428.42 million.

In line with Cahya Mata’s proposal for a first and final tax-exempt dividend of three sen — an increase from two sen the previous year — Maybank Investment Bank (Maybank IB) now expects the group to sustain an annual dividend payout of three sen moving forward.

The research house also projected a 5% increase in cement and construction materials volume, underpinning its forecast of an 18% net profit growth for Cahya Mata in FY2025.

However, Maybank IB marginally revised its earnings estimates downward by 2-3% for FY2025 and FY2026 due to housekeeping adjustments. Consequently, the target price has also been trimmed from RM1.60 to RM1.55.

Despite Maybank IB’s downward revision, it maintained a “buy” call on Cahya Mata, noting that “valuations remain undemanding," with the stock trading at 6.4 times its projected FY2025 price-to-earnings ratio (PER) and 0.3 times its price-to-book ratio (P/B).

MIDF Research, on the other hand, raised its target price to RM1.57 while keeping earnings estimates unchanged for now, pending a management meeting in March.

Moving forward, “CMSB is well-positioned to benefit from stronger construction job flows in Sarawak, given its status as the sole cement producer in the state with sufficient production capacity to meet demand,” the research house added.

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