Positive growth momentum in the sector continues after the steel subsector reported a strong earnings recovery in 2016. Currently, steel bar ASP is hovering at RM2,275/mt (according to MITI), supported by the commencement of mega projects and industry consolidation in China. For cement, we think a significant earnings recovery will be seen only in 2H17 with the roll-out of mega projects which will help narrow rebates on ASPs. Maintain OVERWEIGHT on the sector. Top pick: Ann Joo.

Source: UOB Kay Hian Research - 14 Mar 2017