Lafarge Malaysia to benefit if East Coast Rail Link is revived

Lafarge Malaysia Bhd is in a great position to benefit from a resumption of the East Coast Rail Link's (ECRL), because the cement manufacturer has won contracts under the project, says Affin Hwang Investment Bank Bhd.

Lafarge Malaysia's shares rose 30 per cent yesterday on the news that the rail project might be revived, having been suspended in July 2018.

"We understand that the government will likely decide after Prime Minister Tun Dr Mahathir Mohamad's visit to China in April. If the project is revived, HSS Engineers Bhd and Lafarge Malaysia, which had won contracts, will see earnings contributions as the works resume. Local contractors will also benefit if the requirement for higher local participation is increased from the initial 30 per cnet of works to be awarded by the main contractor, China Communications Construction Co Ltd," said Affin Hwang analyst, Loong Chee Wei.