MBSB
RESEARCH
Thursday 21st. August 2025
Cahya Mata Sarawak Berhad 2QFY25 Results Review
(2852 | CMSB MK) Main | Construction
SHARIAH Compliant
FTSE4Good
Earnings Dip, Structural Catalysts Intact
Maintain BUY. We are adjusting our core earnings estimates downward for FY25E/FY26F by -14.2%/-10.0% respectively to account for the weaker-than-expected performance in 2QFY25. However, we are maintaining our BUY recommendation on CMSB with a lower revised target price of RM1.49, pegging its reduced FY26F EPS of 14.2 sen to a PER of 10.5x, which is in line with its two-year mean as CMSB remains fundamentally supported by multiple near-term and structural catalysts. Looking ahead, the anticipated rollout of major infrastructure and construction projects in Sarawak is expected to drive stronger job flows, placing CMSB in a favourable position to benefit given its role as the state’s sole cement producer and primary supplier. The commencement of construction for Clinker Line 2 at Mambong will enhance production capacity and drive better cost efficiency, supporting margin growth over the longer term. In addition, the Group has secured the RM550.0m Borneo Convention Centre Kuching II project, which has already begun construction and is expected to deliver meaningful earnings contributions in the coming quarters.
Below expectations. Cahya Mata Sarawak’s 2QFY25 core PATAMI decreased 48.5%yoy to RM19.6m following a -11.2% yoy decline in revenue to RM246.9m. PBT dipped back into the red in the quarter, falling >-100.0%yoy and registering a LBT of -RM5.86m. This was attributable to weaker performances and softer demand in the second quarter of the year from most of its divisions, as well as adverse foreign exchange movements in its phosphate division. Additionally, there was also a -13.6%yoy decline in contributions from associates and joint ventures. The cumulative 1HFY25 core earnings fell below our expectations with core PATAMI fell -9.4% yoy to RM51.7m, making up 31.5% of our full-year estimates and 33.1% of consensus. No dividend was declared in the quarter.
Cement division. Cement revenue was almost unchanged at RM146.1m (-2.59%yoy) during the quarter, while PBT fell -27.1%yoy to RM32.0m. The decline in revenue and PBT aligned with the reduction in sales volume, primarily due to sluggish construction activity caused by a prolonged rainfall during 1HFY25 along with slow progress from key infrastructure jobs.
Oiltools divisions. The group’s oiltools division posted a weaker revenue of -55.1%yoy to RM34.5m in the quarter, delivering a 5.8x lower PBT of RM2.30m, due to reduced rig activities across most of the markets CMS operates in relative to the corresponding quarter in FY24.
Other divisions. The road maintenance division performed strongly during the quarter, leading to an increase in revenue of +22.9%yoy to RM34.0m while PBT grew +31.8% to RM3.02m. This was due to higher ongoing orders and work completions achieved by instructed works. The property development division came out of the red in 2QFY25 with a PBT of RM32.0k, mainly attributed to increased sales and revenue recognition of properties. The strategic investments division recorded a PBT of RM1.70m while the support services division stayed out of the red with a PBT of RM126.0k.
RETURN STATISTICS
| Price @ 20th Aug 2025 (RM) | 1.18 |
|---|---|
| Expected share price return (%) | +26.3 |
| Expected dividend yield (%) | +2.5 |
| Expected total return (%) | +28.8 |
SHARE PRICE CHART
(Placeholder for chart description – Actual chart cannot be displayed as per instructions)
| Price performance (%) | Absolute | Relative |
|---|---|---|
| 1 month | -7.8 | -11.5 |
| 3months | -0.8 | -11.0 |
| 12 months | -8.5 | -5.8 |
INVESTMENT STATISTICS
| FYE Dec | 2025E | 2026F | 2027F |
|---|---|---|---|
| Revenue | 1,367.7 | 1,408.7 | 1,451.0 |
| Operating Profit | 116.3 | 126.8 | 130.6 |
| Profit Before Tax | 300.9 | 309.9 | 319.2 |
| Core PATAMI | 140.9 | 152.1 | 174.1 |
| Core EPS (sen) | 13.1 | 14.2 | 16.2 |
| DPS (sen) | 3.0 | 3.0 | 3.0 |
| Dividend Yield | 2.5% | 2.5% | 2.5% |
KEY STATISTICS
| FBM KLCI | 1,588.21 |
|---|---|
| Issued shares (m) | 1074.17 |
| Estimated free float (%) | 51.84 |
| Market Capitalisation (RM’m) | 1,268.32 |
| 52-wk price range | RM0.78 – RM1.46 |
| 3-mth average daily volume (m) | 6.40 |
| 3-mth average daily value (RM’m) | 7.96 |
Top Shareholders (%)
| Majaharta Sdn Bhd | 12.54 |
| Taib Lejla | 10.33 |
| Lembaga Tabung Haji | 6.80 |
Analyst
MIDF Research
research@midf.com.my
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MBSB
RESEARCH
Thursday 21st. August 2025
Phosphate division. The division has yet to generate any revenue as it has yet to achieve commercialisation level and it continues to incur a LBT amounting to -RM56.2m for 2QFY25, with losses increasing by ->100%yoy from the 2QFY24 LBT of -RM21.2m. This was primarily due to the weakening of USD against MYR which caused unrealised foreign exchange losses and fair value losses in investment securities in 1HFY25 as compared to unrealised foreign exchange gains and fair value gains in the previous year’s corresponding quarter. Recall that there is still an ongoing arbitration with Sesco Bhd following a dispute that led to the electrical supply termination to the phosphate plant in Samalaju; and no phosphate can be sold until the arbitration is concluded. However, management has guided that the commissioning of Cahya Mata Phosphates Industries’ plant remains on track, with commissioning to resume in 4QCY25. Once operational, the end products are targeted for export to Japan, Korea and Russia.
CAHYA MATA SARAWAK: 2QFY25 RESULTS SUMMARY
All in RM’m unless stated otherwise
| Income Statement | Quarterly Results | Cumulative | ||||||
|---|---|---|---|---|---|---|---|---|
| 2Q25 | 1Q25 | 2Q24 | QoQ | YoY | 6MFY25 | 6MFY24 | YoY | |
| Revenue | 246.9 | 246.1 | 278.0 | 0.3% | -11.2% | 493.1 | 555.4 | -11.2% |
| Cost of sales | (182.1) | (178.3) | (195.9) | -2.1% | 7.0% | (360.4) | (397.1) | 9.2% |
| Gross profit | 64.8 | 67.8 | 82.1 | -4.4% | -21.1% | 132.6 | 158.3 | -16.2% |
| Other income | 10.4 | 10.5 | 8.8 | -1.1% | 17.2% | 20.8 | 31.5 | -33.9% |
| Administrative expenses | (38.6) | (31.2) | (31.5) | -23.8% | -22.3% | (69.7) | (61.4) | -13.6% |
| Selling and Marketing expenses | (8.2) | (7.6) | (8.0) | -8.6% | -2.6% | (15.8) | (16.2) | 2.6% |
| Other expenses | (15.6) | (19.9) | (9.0) | 21.3% | -74.3% | (35.5) | (26.1) | -36.1% |
| Operating Profit | 12.8 | 19.7 | 42.4 | -35.2% | -69.9% | 32.5 | 86.1 | -62.3% |
| Finance costs | (5.0) | (5.3) | (7.7) | 5.7% | 35.3% | (10.3) | (15.4) | 33.4% |
| Assoc. and JV | 14.4 | 12.4 | 16.6 | 15.3% | -13.6% | 26.8 | 37.9 | -29.2% |
| Profit Before Taxation | (5.9) | 26.9 | 50.3 | >-100% | >-100% | 21.0 | 107.6 | -80.5% |
| Income Tax Expenses | (17.5) | (8.0) | (19.1) | >-100% | 7.9% | (25.6) | (36.8) | 30.4% |
| Recorded Profit | (23.4) | 18.8 | 31.2 | >-100% | >-100% | (4.6) | 70.8 | >-100% |
| PATAMI | (11.3) | 25.3 | 33.4 | >-100% | >-100% | 14.0 | 71.6 | -80.4% |
| Non-Controlling interest | (12.1) | (6.5) | (2.1) | -85.5% | >-100% | (18.6) | (0.8) | >-100% |
| Core PATAMI | 19.6 | 32.1 | 38.0 | -39.0% | -48.5% | 51.7 | 57.0 | -9.4% |
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MBSB
RESEARCH
Thursday 21st. August 2025
FINANCIAL SUMMARY
| Profit or Loss (RM’m) | 2023A | 2024A | 2025E | 2026F | 2027F | Cash Flow (RM’m) | 2023A | 2024A | 2025E | 2026F | 2027F |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 1,200.9 | 1,196.3 | 1,367.7 | 1,408.7 | 1,451.0 | PBT | 128.2 | 190.1 | 300.9 | 309.9 | 319.2 |
| Gross profit | 280.6 | 333.0 | 288.6 | 302.9 | 312.0 | Depreciation & Amortisation | 89.5 | 84.8 | 65.4 | 67.4 | 69.4 |
| Operating profit | 66.5 | 121.9 | 116.3 | 126.8 | 130.6 | Changes in working capital | -132.6 | -102.3 | -5.8 | -6.0 | -6.2 |
| Finance costs | (35.2) | (27.9) | (27.4) | (27.4) | (26.4) | Operating cash flow | -57.0 | 54.9 | 144.9 | 146.7 | 148.5 |
| Profit before tax | 128.2 | 190.1 | 300.9 | 309.9 | 319.2 | Capital expenditure | -46.2 | -35.3 | -86.7 | -89.3 | -92.0 |
| Tax | (46.6) | (65.2) | (60.2) | (60.2) | (59.2) | Investing cash flow | -16.7 | 137.9 | 247.1 | 244.5 | 241.8 |
| PATAMI | 114.4 | 128.2 | 140.9 | 152.1 | 174.1 | Debt raised/(repaid) | -260.4 | -133.3 | – | – | – |
| Core PATAMI | 97.8 | 131.4 | 140.9 | 152.1 | 174.1 | Dividends paid | -36.1 | -21.5 | -23.5 | -23.5 | -23.5 |
| Balance Sheet (RM’m) | 2023A | 2024A | 2025E | 2026F | 2027F | Financing cash flow | -294.7 | -154.0 | -30.0 | -30.0 | -30.0 |
| Property, plant and equipment | 1,461.8 | 1,402.2 | 1,551.7 | 1,536.2 | 1,520.8 | Net cash flow | -368.5 | 38.8 | 362.0 | 361.2 | 360.4 |
| Intangible assets | 12.5 | 0.9 | 3.5 | 3.5 | 3.5 | Beginning cash flow | 963.4 | 605.7 | 623.6 | 985.6 | 1346.8 |
| Non-current assets | 3,044.2 | 3,188.8 | 3,148.6 | 3,131.1 | 3,117.7 | Ending cash flow | 605.7 | 623.6 | 985.6 | 1346.8 | 1707.2 |
| Cash | 617.7 | 647.5 | 822.7 | 1,007.2 | 1,007.2 | Profitability Ratios (%) | 2023A | 2024A | 2025E | 2026F | 2027F |
| Trade debtors | 272.3 | 285.9 | 265.8 | 265.8 | 265.8 | Operating profit margin | 23.4% | 27.8% | 21.1% | 21.5% | 21.5% |
| Trade creditors | 643.1 | 565.1 | 730.3 | 730.3 | 730.3 | PAT margin | 9.5% | 10.7% | 10.3% | 10.8% | 12.0% |
| Short-term debt | 113.0 | 117.4 | 286.2 | 286.2 | 286.2 | Core PAT margin | 8.1% | 11.0% | 10.3% | 10.8% | 12.0% |
| Current liabilities | 807.4 | 713.3 | 1,216.2 | 1,216.2 | 1,216.2 | ||||||
| Long-term debt | 207.0 | 95.4 | 255.8 | 255.8 | 255.8 | ||||||
| Non-current liabilities | 320.5 | 198.8 | 397.6 | 397.6 | 397.6 | ||||||
| Share capital | 867.9 | 868.7 | 867.9 | 867.9 | 867.9 | ||||||
| Retained earnings | 2,432.0 | 2,540.0 | 2,671.9 | 2,808.8 | 2,950.7 | ||||||
| Equity | 3,547.7 | 3,636.6 | 3,768.5 | 3,905.4 | 4,047.3 |
Source: Bloomberg, MBSBR
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MBSB
RESEARCH
Thursday 21st. August 2025
MBSB RESEARCH (formerly known as MIDF RESEARCH) is part of MBSB Investment Bank Berhad (formerly known as MIDF Amanah Investment Bank Berhad)
(Bank Pelaburan) (A Participating Organisation of Bursa Malaysia Securities Berhad)
DISCLOSURES AND DISCLAIMER
This report has been prepared by MBSB Investment Bank Berhad (formerly known as MIDF AMANAH INVESTMENT BANK BERHAD) 197501002077 (24878-X).
It is for distribution only under such circumstances as may be permitted by applicable law. Readers should be fully aware that this report is for information purposes only. The opinions contained in this report are based on information obtained or derived from sources that we believe are reliable. MBSB INVESTMENT BANK BERHAD (formerly known as MIDF AMANAH INVESTMENT BANK BERHAD) makes no representation or warranty, expressed or implied, as to the accuracy, completeness or reliability of the information contained therein and it should not be relied upon as such. This report is not, and should not be construed as, an offer to buy or sell any securities or other financial instruments. The analysis contained herein is based on numerous assumptions. Different assumptions could result in materially different results. All opinions and estimates are subject to change without notice. The research analysts will initiate, update and cease coverage solely at the discretion of MBSB INVESTMENT BANK BERHAD (formerly known as MIDF AMANAH INVESTMENT BANK BERHAD). The directors, employees and representatives of MBSB INVESTMENT BANK BERHAD (formerly known as MIDF AMANAH INVESTMENT BANK BERHAD) may have an interest in any of the securities mentioned and may benefit from the information herein. Members of the MBSB Group and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein This document may not be reproduced, distributed or published in any form or for any purpose.
MBSB INVESTMENT BANK (formerly known MIDF INVESTMENT BANK): GUIDE TO RECOMMENDATIONS
STOCK RECOMMENDATIONS
BUY Total return is expected to be >10% over the next 12 months.
TRADING BUY The stock price is expected to rise by >10% within 3 months after a Trading Buy rating has been assigned due to positive news flow.
NEUTRAL Total return is expected to be between -10% and +10% over the next 12 months.
SELL Total return is expected to be <-10% over the next 12 months.
TRADING SELL The stock price is expected to fall by >10% within 3 months after a Trading Sell rating has been assigned due to negative news flow.
SECTOR RECOMMENDATIONS
POSITIVE The sector is expected to outperform the overall market over the next 12 months.
NEUTRAL The sector is to perform in line with the overall market over the next 12 months.
NEGATIVE The sector is to underperform the overall market over the next 12 months.
ESG RECOMMENDATIONS* – source Bursa Malaysia and FTSE Russell
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