KUALA LUMPUR: RHB Investment Research believes the post-election sell-off on Cahya Mata Sarawak is temporary as its traditional businesses are backed by its expertise and heavy investments.

The research house maintained its buy call on the counter but cut its target price to RM4.57 from RM4.96.

Cahya Mata Sarawak's 1Q18 core net profit of RM39mil came in broadly in line with RHB's expectaions. 

"Revenue grew 15.3%, mainly driven by higher contributions from CMS’ construction & road maintenance, construction materials & trading, and cement divisions. 

"Net profit grew 50.7%, mainly from associate OM Materials Sarawak’s (OMS) improved performance, but was offset by lower earnings from the group’s cement wing due to higher repair costs."

RHB maintains its F18-20F earnings as it expects stronger 2H18 net profits due to a recovery in cement demand especially from higher progress at the Pan Borneo Highway (Sarawak) project.

However, it lowered its sum-of-parts-based target price to RM4.57 from RM4.96 to impute a lower 16x price-earnings from 20x previously, to factor in the risk of a potential delay in the project.