CMS shares up on acquisition proposal

Stock Name: CMSB
Company Name: CAHYA MATA SARAWAK BHD

Research House: MAYBANK

Price Call: BUY

Target Price: 5.00

KUALA LUMPUR: Cahya Mata Sarawak Bhd's (CMS) shares rose in the early session after its wholly-owned unit, Samalaju Industries Sdn Bhd (SISB), proposed to acquire an additional five per cent stake in OM Materials (S) Pte Ltd (OMS) from OM Holdings Ltd for US$18.45 million.

At 11 am, CMS's share price was up four sen to RM4.51 with 112,200 shares changing hands.

The acquisition, expected to complete by end-March this year, would increase SISB's stake in the ferrosilicon manganese alloy smelting plant in the Samalaju Industrial Park, Sarawak to 25 per cent with the remaining 75 per cent owned by OM Holdings.

Maybank Investment Bank views the deal as positive, saying it would enhance recurring income from CMS' investments in the Sarawak Corridor of Renewable Energy (SCORE).

"We estimate 3-5.5 per cent potential upside to CMS' financial years 2015-2017 earnings per share forecasts from the acquisition," it said in a research note today.

In addition, it said OM Holdings would redeploy the proceeds from this disposal for the development of OMS phase II to further enhance earnings.

Maybank Investment said despite the lacklustre ferrosilicon price, OMS would still be able to remain profitable due to its low cost structure as it leverages on the low energy cost in Sarawak.

The investment bank has reiterated its 'buy' call on CMS with a target price of RM5.00. - Bernama

Price hardly reflects fundamentals

Stock Name: CMSB
Company Name: CAHYA MATA SARAWAK BHD

Research House: MIDF

Price Call: BUY

Target Price: 6.86

Cracks in manufacturing margin

Stock Name: CMSB
Company Name: CAHYA MATA SARAWAK BHD

Research House: CIMB

Price Call: HOLD

Target Price: 3.25

Cahya Mata Sarawak - Update - Demystifying the growth story

Stock Name: CMSB
Company Name: CAHYA MATA SARAWAK BHD

Research House: CIMB

Price Call: HOLD

Target Price: 3.39

Cahya Mata Sarawak - 4QFY11 RESULTS - Dividend surprise

Stock Name: CMSB
Company Name: CAHYA MATA SARAWAK BHD

Research House: CIMB

Price Call: HOLD

Target Price: 2.56

CAHYA MATA SARAWAK - 3QFY11 RESULTS - REACQUISITION MOVE REINFORCES MARGINS

Stock Name: CMSB
Company Name: CAHYA MATA SARAWAK BHD

Research House: CIMB

Price Call: HOLD

Target Price: 2.27

Cahya Mata Sarawak 2QFY11 above expectations: Stronger building blocks

Stock Name: CMSB
Company Name: CAHYA MATA SARAWAK BHD

Research House: CIMB

Price Call: HOLD

Target Price: 2.26

CMSB - Cahya Mata Sarawak: All eyes on 10MP and SCORE

Stock Name: CMSB
Company Name: CAHYA MATA SARAWAK BHD
Research House: CIMB

Cahya Mata Sarawak Bhd
(Feb 16, RM2.79)
Maintain hold at RM2.82 with revised target price RM3.16 (from RM3): Though the rollout of projects in the Sarawak Corridor of Renewable Energy (SCORE) is likely to gain momentum, there is still little to suggest that the planned Sarawak Aluminium Company Sdn Bhd (Salco) aluminium smelter plant will make swift progress given the unresolved issues for the Bakun dam, which is supposed to supply electricity to the Salco plant.

Earnings drivers for CMS will remain the manufacturing and construction material division which should continue to benefit from the pickup in the rollout of jobs under SCORE and the 10th Malaysia Plan (10MP) in Sarawak.

We maintain our 'hold' rating. Our target price, which is based on a 10% discount to our target market PER, is raised from RM3 to RM3.16 for a higher target market PER of 14.5 times. We prefer Muhibbah Engineering (M) Bhd which is our top small-cap construction pick.

We were too cautious on the stock which rallied in 2010. Stoked by news flow on potential project flows in SCORE and the award of a road project, CMS's share price surged 80% last year, outperforming the construction stocks under our coverage which rose 36% on average.

This year marks the implementation of Phase 2 of SCORE. Various road and infrastructure projects under the 10MP and the Economic Transformation

Programme (ETP) have yet to be implemented. Execution will be a key theme for this year, backed by the 10MP's RM4.6 billion budget for Sarawak.

CMS is likely to release its 4Q10 results in the last week of February. We expect an earnings before interest and tax (Ebit) margin of around 13% to 14% for the full year driven by manufacturing and construction materials.

The Sarawak state election may be around the corner, given the expectations that the general election may be called as early as 2H11. However, the upside from the election factor may already be largely in CMS's share price which shot up 80% in 2010. ' CIMB Research, Feb 16


This article appeared in The Edge Financial Daily, February 17, 2011.

CMSB - Cahya Mata Sarawak: All eyes on 10MP and SCORE

Stock Name: CMSB
Company Name: CAHYA MATA SARAWAK BHD
Research House: CIMB

Cahya Mata Sarawak Bhd
(Feb 16, RM2.79)
Maintain hold at RM2.82 with revised target price RM3.16 (from RM3): Though the rollout of projects in the Sarawak Corridor of Renewable Energy (SCORE) is likely to gain momentum, there is still little to suggest that the planned Sarawak Aluminium Company Sdn Bhd (Salco) aluminium smelter plant will make swift progress given the unresolved issues for the Bakun dam, which is supposed to supply electricity to the Salco plant.

Earnings drivers for CMS will remain the manufacturing and construction material division which should continue to benefit from the pickup in the rollout of jobs under SCORE and the 10th Malaysia Plan (10MP) in Sarawak.

We maintain our 'hold' rating. Our target price, which is based on a 10% discount to our target market PER, is raised from RM3 to RM3.16 for a higher target market PER of 14.5 times. We prefer Muhibbah Engineering (M) Bhd which is our top small-cap construction pick.

We were too cautious on the stock which rallied in 2010. Stoked by news flow on potential project flows in SCORE and the award of a road project, CMS's share price surged 80% last year, outperforming the construction stocks under our coverage which rose 36% on average.

This year marks the implementation of Phase 2 of SCORE. Various road and infrastructure projects under the 10MP and the Economic Transformation

Programme (ETP) have yet to be implemented. Execution will be a key theme for this year, backed by the 10MP's RM4.6 billion budget for Sarawak.

CMS is likely to release its 4Q10 results in the last week of February. We expect an earnings before interest and tax (Ebit) margin of around 13% to 14% for the full year driven by manufacturing and construction materials.

The Sarawak state election may be around the corner, given the expectations that the general election may be called as early as 2H11. However, the upside from the election factor may already be largely in CMS's share price which shot up 80% in 2010. ' CIMB Research, Feb 16


This article appeared in The Edge Financial Daily, February 17, 2011.