This article first appeared in The Edge Financial Daily, on January 4, 2016.
Cahya Mata Sarawak Bhd
This year, Sarawak would hold its first state election under Chief Minister Tan Sri Adenan Satem. The federal and state governments have announced infrastructure developments for Sarawak, especially the RM27 billion Pan-Borneo Highway to garner goodwill of the people.
One of the beneficiaries of the mega projects would be Cahya Mata Sarawak Bhd (CMS), which is involved in cement manufacturing, construction materials, trading, construction, road maintenance, property development, financial services, education and other services.
“In addition, CMS is the largest listed company in Sarawak and it is also a proxy,” said RHB Research Institute analyst Ng Sem Guan.
CMS is controlled by Sarawak governor Tan Sri Taib Mahmud’s family.
Ng said, post election, the valuation of CMS will revert to its fundamentals based on economic activities in the state to sustain the earnings.
RHB Research has a “buy” call on CMS with a sum-of-parts-based target price of RM5.55, offering 8% upside from last Thursday’s closing price of RM5.13.
CMS gained 29.54% in 2015 up to its closing price of RM5.31 on Dec 31, with a market capitalisation of RM5.48 billion.
http://www2.theedgemarkets.com/my/article/stock-picks-2016-cahya-mata-sarawak
