AmBank Research keeps overweight on cement sector
Published on: Saturday, July 31, 2021
By: Bernama
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Kuala Lumpur: AmBank Research has maintained its “overweight” rating on the cement sector, as production restraints following the sector’s consolidation in 2019 resulted in a more rational competitive landscape in Peninsular Malaysia.In a note Friday, the research house said the consolidation helped to resolve some issues, namely supply, which should at least lift the implied value of clinker capacity.“Beyond the pandemic and upon the recovery of the two key cement-consuming industries, namely property and construction, a demand-fuelled re-rating is imminent, although visibility is still lacking at this juncture,” it said.
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Ambank Research also projects the average net cement selling price in Peninsular Malaysia to rise marginally by two per cent to RM240 per tonne in 2021, versus an estimated RM235 per tonne in 2020.
“We believe the conditions are conducive for further price hikes with the emergence of a price leader in the market following YTL Cement’s acquisition of Malayan Cement in 2019.Stay up-to-date by following Daily Express’s Telegram channel.
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