MIDF Research has maintained its buy call on Cahya Mata Sarawak Bhd (CMSB) but lowered its target price to RM1.70 from RM2.21.
The adjusted target price comes on the back of a sanguine outlook for the construction sector in lieu of slow progress in construction activities, MIDF analyst Kifni Kamaruddin said in a note today.
CMSB registered sales of RM282.5 mil for the first quarter ended March 31, 2020, from RM418.2 mil for the same period last year.
“The results trailed both our and consensus estimates, representing only 8% and 11% of full-year forecasts. We attribute the underperformance to lower contribution from all the divisions except for the cement division,” Kifni said.
But he is anticipating “brighter prospects” for the group as CMSB is a likely beneficiary of the RM11 bil allocated by the Sarawak government for major infrastructure projects.
CMSB’s share price opened 2.56% higher at RM1.60. – July 1, 2020