Cahya Mata Sarawak Bhd’s (CMS) key operating segments are expected to recover in subsequent quarters but its 25%-owned OM Materials (Sarawak) Sdn Bhd will still be a drag on earnings, according to AllianceDBS Research.
“While we believe most of CMS key operating segments should recover in subsequent quarters given the rollout of Pan Borneo Highway projects, the continued weakness at 25%-owned OM Sarawak will still be a drag on earnings as well as sentiment of the stock.
“As such, we do not foresee a re-rating in CMS’s share price unless there is a turnaround in OM Sarawak from improving ferrosilicon prices,” AllianceDBS said.
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“While we believe most of CMS key operating segments should recover in subsequent quarters given the rollout of Pan Borneo Highway projects, the continued weakness at 25%-owned OM Sarawak will still be a drag on earnings as well as sentiment of the stock.
“As such, we do not foresee a re-rating in CMS’s share price unless there is a turnaround in OM Sarawak from improving ferrosilicon prices,” AllianceDBS said.
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