The research firm said demand for heavy mining equipment remains robust especially in the group’s largest Australian market segment, underpinned by the highly profitable metallurgical coal prices at US$220 (RM984.94) to US$250 (RM1,119.25) per tonne.

HLIB said in a note that Sime Darby’s Malaysian market saw an increase in orders since the end of December 2022. However, it said the group remains cautious due to the moderate market sentiment.

At the same time, HLIB remarked that Sime Darby’s China market remains slow and highly competitive due to the presence of numerous major domestic original equipment manufacturers.

“Moving forward, Sime Darby will continue to leverage the strong momentum of its industrial segment, driven by mining in Australia.

“We also expect a continued decent dividend yield of 5.5%-6.4% for FY2023 to FY2025, while the disposal of Ramsay Sime Darby Healthcare Sdn Bhd may provide upside from the special dividend,” it said.

HLIB has maintained a “buy” call on Sime Darby with an unchanged target price of RM2.70.

As at 2.42pm, Sime Darby’s shares rose 1 sen or 0.46% to RM2.19, giving it a market capitalisation of RM14.86 billion.