Posted on 11 Feb 2026

CSC Steel Holdings Bhd will be supported by stabilising industry conditions and a stronger earnings base built over the past year, says TA Research.

While global steel market fundamentals remained fragile, the research house noted that the company’s outlook is improving, driven by “incremental demand recovery and ongoing supply-side adjustments”, even as competition from elevated Chinese exports continues to cap pricing upside.

For CSC Steel, a downstream steel producer with a focus on coated and value-added products, the environment presented both challenges and opportunities.

TA Research said, in a note yesterday, recent policy measures including export licensing on selected Chinese steel products and tougher trade protection in major markets such as the United States, European Union and Canada are expected to improve market discipline and support a gradual recovery in steel prices.

Domestically, steady construction activity and infrastructure projects continued to underpin baseline demand.

Against this backdrop, CSC Steel closed the financial year ended Dec 31, 2025 (FY25) with a solid and resilient performance. Core earnings came in at RM71.1mil, broadly meeting expectations despite an 8.8% year-on-year decline in revenue.

The softer top line reflected weaker average selling prices and lower sales volumes amid a global steel price downcycle.

However, TA Research highlighted that CSC Steel’s core earnings surged 131% year-on-year, underscoring the effectiveness of its cost discipline and operational execution.

“Profitability improved materially, supported by lower input costs from effective material cost controls and the strengthening of the ringgit,” the research house said.

The local currency’s appreciation of roughly 12% against the US dollar provided a meaningful tailwind, helping to cushion the impact of weaker steel prices.

The group ended the year debt-free, with a net cash balance of RM414.1mil, with TA Research noting that the group’s balance sheet had not only enhanced earnings resilience but also gave management the flexibility to navigate near-term cost pressures from rising electricity tariffs and the impending implementation of carbon taxation.

CSC Steel proposed a first and final dividend of 14.1 sen per share for FY25, double the payout a year earlier and translating into a dividend yield of about 9.4%.

The research house viewed this as a key investment highlight, supported by healthy cash flows and disciplined capital management.

Looking ahead, TA Research said CSC Steel’s strategy of maintaining operational efficiency while deepening its focus on higher value-added steel products differentiated the group from upstream steel producers that were exposed to commodity price volatility.

“As a downstream player, CSC Steel is poised to enjoy margin improvement by focusing on value-added steel products, which provide greater pricing power through product differentiation,” the brokerage said.

The research unit remains positive on CSC Steel’s longer-term prospects, raising its target price to RM1.89 and maintained a “Buy” call, citing steady earnings delivery, a fortress balance sheet and an attractive dividend yield as key drivers supporting the stock’s investment appeal.

Source:The Star

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