Hume Cement Industries

[winston]

not vested

1QFY25: Below Expectations;

Slower Rollout Of Mega Projects

Hume’s 1QFY25 core net profit of RM47.4m (+12% qoq; -2% yoy) accounted for only 20% of our full-year forecast, largely due to weaker-than-expected market demand, despite cement ASP remaining stable at RM380/mt.

A potential near-term catalyst is the commencement of the Penang LRT project in 2025.

We revise down our FY25/26/27 earnings estimates by 14%/6%/5% respectively to reflect lower volume output.

Maintain BUY with a lower target price of RM4.60.

Source: UOBKH

https://39646150.fs1.hubspotusercontent ... (HUME%20MK)%20241115.pdf?utm_medium=email&_hsenc=p2ANqtz-9_wvLnIl5h-NeeCCni7zzUw8rP29elCOFhLWlSO2y3f0eZ2VIy8t3mMf89NRVRErd7esSACaqSlmN5j8d7hxaxF6Zw1g&_hsmi=334046719&utm_content=334046719&utm_source=hs_email

[winston]

not vested

Business Remains Resilient Despite Recent Headwinds

The impact of stricter overloading truck enforcement is expected to be mitigated through price pass-through, operational efficiencies, and improved truck utilisation, supported by management’s strong execution track record.

Any potential relaxation of cement import conditions is unlikely to materially impact the domestic cement market, given ample local excess capacity, the cost disadvantage of imported cement, and cement’s short shelf life.

Following the disposal of the non-core business, we expect further capital management upside.

Maintain BUY; target price: RM4.51.

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email

[winston]

not vested

2QFY26: Above Expectations; Strong Logistics Execution

2QFY26 results came in above expectations with core net profit of RM63.8m (+4% qoq; +32% yoy) due to better-than-expected logistics management despite disruptions from the enforcement of the national transport policy.

Following the disposal of its non-core concrete business, we expect further capital management upside, with improved dividend payouts in subsequent quarters.

We upgrade our FY26-27 earnings forecasts by 4-5% to reflect higher truck utilisation and improved logistics efficiency.

Maintain BUY; target price: RM4.87.

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email