Cahya Mata Sarawak Bhd

[winston]

not vested

Cahya Mata Sarawak on track to reach 6-month high, says RHB Retail Research

by Surin Murugiah

The stock jumped above the resistance level of RM1.80, with higher trading volume.

It said the stock is rising in tandem with increasing trading volume, indicating strong buying interest.

“If it can stay above the resistance level, we think the bullish trend may climb towards next resistance of RM2.00, followed by RM2.20.

“This positive expectation should remain valid if the RM1.65 support is not breached,” it said.

Source: The Edge

https://www.theedgemarkets.com/article/ ... l-research

[winston]

not vested

Tactical moves

We raise FY20E core net profit by 15% post results briefing.

FY21-22E earnings are largely unchanged which imply a strong 38% recovery in FY21E.

CMS’ prospects are in-tact, as management works on retaining its strategic positioning.

Key risk is COVID-19 shutdown/s, impacting its traditional core businesses but cushioned by its strategic investments.

Our RNAV-TP is unchanged at MYR2.50.

CMS should continue to benefit from the strong pipeline of construction activities in Sarawak.

Source: Maybank

https://factsetpdf.maybank-ke.com/PDF/2 ... 29b69d.pdf

[winston]

not vested

Cahya Mata Sarawak (CMS MK)
Gearing Up For Post-Pandemic Growth

In 2021, we expect earnings to gradually pick up on the back of higher demand from the
rejuvenation of construction activities supported by the company’s strategic initiatives,
economic recovery and upcoming state election later this year.

The outlook for OM Sarawak is also compelling amid stronger ferrosilicon and manganese alloy prices due to the commodities supercycle.

Upgrade to BUY to capitalise on Sarawak’s development growth with a higher target price of RM2.60.

Source: UOBKH

https://research.uobkayhian.com/content ... 4518f59812

[winston]

not vested

Valuation

We value CMS based on sum-of-parts (SOP) valuation given its diversified business.

For its core business, we value it at 13x that is at -1SD of its 5 year mean.

For its listed business, we value it at market value.

TP MYR 2.81

Source: DBS

https://www.dbs.com.sg/treasures/aics/s ... CMS_MK.xml

[winston]

not vested

Cahya Mata Sarawak (CMS MK)
On Track For Recovery Riding On Sarawak Growth

CMS is well poised to benefit from the economic recovery, being one of the proxies of
Sarawak’s development growth.

We came away from CMS’ session in our Malaysia Corporate Day E-Conference feeling optimistic of its prospects, backed by its strong orderbook and robust pipeline of potential mega contract wins across most of its core divisions.

Its key associates are expected to drive the company’s growth moving forward in the long term. Maintain BUY. Target price: RM2.60.

Source: UOBKH

https://research.uobkayhian.com/content ... f4cb70bc44

[winston]

not vested

Cahya Mata Sarawak suspends CFO to facilitate probe into financial mismanagement claim

by Wong Ee Lin

Source: theedgemarkets.com

https://www.theedgemarkets.com/article/ ... ment-claim

[winston]

not vested

Tagging on a governance risk factor to our valuation

At yesterday’s investor briefing, CMS’ Group MD is confident that there is no fraud involved in the case relating to the suspension of its Group CFO.

An independent consultant will be appointed to investigate the losses at its Pan Borneo project (at the contract level) and to review the group’s control system and risk mitigation framework.

The findings, in our view, could take a while. Pending its outcome, we are tagging on a governance risk factor to our valuation.

Our revised MYR1.75 TP (MYR2.50 previously) is based on 0.7x (1.0x previously) our RNAV estimate.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/219766.pdf

[winston]

not vested

1Q21: Positively surprised
Core forecasts maintained

CMS’ 1Q21 headline net profit of MYR78m (+350% YoY) included a MYR29m gain from the sale of 46.6m shares in Kenanga.

Ex- one-off, core net profit of MYR49m (+185% YoY) was ahead of our expectation at 34% of our FY21E, with the beat coming from its cement ops and associates contribution.

We raise FY21E headline net profit by 20% to incorporate the MYR29m one-off gain, but maintain FY21E core net profit as we are cautious due to rising COVID-19 cases in Sarawak.

HOLD maintained, with a trimmed MYR1.73 TP (RNAV-based) upon updating some parameters.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/222016.pdf

[winston]

not vested

Amid extreme challenges
Realigning priorities

Amid extreme challenges brought on by the pandemic, CMS’ priorities are to remain in operations under strict SOP compliance and to catch-up on its plans.

Its focus are to maintain a strong cash position, continue its collaboration with the Sarawak State, and build its leadership strength.

We make no change to our earnings forecasts. Our MYR1.73 TP is based on 0.7x RNAV, incorporating a governance risk factor pending outcome of an independent investigation relating to its Group CFO. Maintain HOLD.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/223355.pdf

[winston]

not vested

Valuation

We value CMS based on sum-of-parts (SOP) valuation given its diversified business.

For its core business, we value it at 13x that is at -1SD of its 5 year mean.

For its listed business, we value it at market value.

TP: RM 2.81

Source: DBS

https://www.dbs.com.sg/treasures/aics/s ... CMS_MK.xml