Press Metal / Koon Poh Keong

[winston]

not vested

Press Metal Aluminium Holdings (PMAH MK)
2022: Broadly Within Expectations; Ample Room For Growth After Record Profit

Results came in broadly within expectations.

Besides global structural demand and China’s reopening, supply tightness is still stemming from disruption caused by the Russia-Ukraine war and power curtailment in China.

The additional smelting capacity is set to drive a two-year net profit CAGR of 15% from 2022 even after the record year.

We trimmed 2022-23 earnings by 2-4% for house-keeping purposes.

Maintain BUY. Target price: RM6.10.

Source: UOBKH

https://research.uobkayhian.com/content ... 256a0f3e53

[winston]

not vested

Largest aluminium producer in Southeast Asia
Initiate at BUY

We initiate coverage on Press Metal with a BUY and SOTP-based TP of MYR5.65.

Its entrenched position as the largest aluminium smelter in Southeast Asia (SEA), strategically located within close proximity to raw materials and having significant energy cost advantage via its hydropowered facility in Sarawak are its strong attributes.

Coupled with sustained projected aluminium price of USD2,500/t due to ongoing supply-demand tightness, we believe this could anchor our 12.9% FY22- 25E 3-year earnings CAGR.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/311726.pdf

[winston]

vested

Press Metal secures export deal worth RM780m

Press Metal Aluminium Holdings Bhd has secured an immediate export sale of aluminium ingots worth RM110 million from Hong Kong’s Daching Enterprises Ltd, and the companies have also sealed a five-year export deal of the same product for RM670 million.

The group is one of the world's largest manufacturers of premium thin gauge aluminium foil, with an annual production capacity of 120,000 tonnes of aluminium foil and 220,000 tonnes of aluminium sheet products.

Widely used in the packaging of food and beverages as well as pharmaceutical products, and as cathode foil in batteries for electric vehicles.

Source: Bernama

https://www.theedgemarkets.com/node/662522

[winston]

not vested

Press Metal shares hit one-year high amid rising aluminum prices

By Justin Lim

London Metal Exchange's (LME) aluminium prices rebounded from this year’s low of US$2,159 on Jan 22 to its one-year high of US$2,421 on Thursday, posting a gain of 12.51% within the period.

In less than a month, the stock has gained 13.7% from this year’s low of RM4.50 on March 6.
The stock has risen 6.84% year to date from RM4.79.

Recovery demand and tight inventory will support LME aluminum prices, with demand for aluminum in China driven by solar power and new energy vehicle industries.

On the supply side, the research house said LME’s aluminium stockpile remains relatively low at 549,000 tonnes towards end-2023, while China’s aluminium stockpile was around 434,000 tonnes, with no major import arrival and aluminium output impacted negatively after Yunnan’s production was cut in the fourth quarter last year.

“Additionally, the ban on Russia's metal could lend further strength to the LME aluminium prices,” it added.

Every US$100 per tonne increase to its current spot aluminium price assumption of US$2,400 per tonne in 2024 would increase Press Metal’s earnings by 16% annually, assuming alumina cost of US$360 per tonne (implying an around 15.5% cost ratio) and carbon anode prices of 6,000 yuan per tonne.

Press Metal’s net profit fell 13.68% to RM1.21 billion for the financial year ended Dec 31, 2023 (FY2023) from RM1.41 billion in FY2022, as revenue fell 12% year-on-year to RM13.8 billion amid a softening of metal prices.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/707044

[winston]

not vested

Steady earnings seen for Press Metal in 1Q24

Rising costs may drag on margins.

1Q24 core earnings to come in at the range of RM330mil-RM350mil, representing 21% to 22% of our FY24 forecasts.

Aluminium spot prices of US$2,203 per tonne versus US$2,193 in 4Q23, and US$2,400 in 1Q23.

The price of alumina rose 8% quarter-on-quarter (q-o-q) and this may drag on Press Metal’s smelting margins.

Rising logistic costs.

Source: The Star

https://www.thestar.com.my/business/bus ... al-in-1q24

[winston]

not vested

Press Metal Aluminium Holdings (PMAH MK)
Aluminium Prices Rebound; Supply Tightness To Drive Strength In 2024

LME aluminium prices have extended their uptrend on the news of sanctions imposed on Russian metal and potential tariff hikes on Chinese metal, on top of the supply restriction and demand recovery.

We believe there could be more upside, underpinned by a demand recovery, structural supply tightness and a reversal in the US interest rate cycle.

Further impetus could come from a meaningful VAPs contribution brought about by the group's aggressive expansion. Maintain BUY. Target price: RM6.72.

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email

[winston]

not vested

Press Metal to capitalise on green market preferences

For the first quarter ended March 31, 2024 (1Q24), Press Metal’s revenue increased 17.7% year-on-year (y-o-y) to RM3.62bil due to optimised sales volume and strength of the US dollar.

Earnings grew 44.7% y-o-y to RM408.04mil on higher contributions by its associates.

He said significant de-stocking was completed last year, which led some manufacturers to replenish inventory, while the higher premiums since the first quarter underscored a more promising demand outlook amid supply tightness.

Source: The Star

https://www.thestar.com.my/business/bus ... references

[winston]

not vested

Press Metal Aluminium Holdings (PMAH MK)
1Q24: Above Expectations; Stellar Aluminium Prices To Boost Earnings Further

While PMetal’s 1Q24 results made up 24%/26% of our/consensus expectations, we deem the results above expectations as we expect sequential earnings boosted by higher LME aluminium prices.

This is underpinned by the Russian metal ban and demand resurgence from China.

We increase our 2024-25 earnings by 8%/7%.

A US$100/tonne increase to our LME aluminium assumption of US$2,6000/tonne could boost earnings by 13% in 2025.

Maintain BUY. Target price: RM7.00.

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email

[winston]

not vested

Strong 1Q24 due to higher hedge prices
Results beat; tactical U/G to BUY @ MYR6.10 TP

1Q24 results beat expectations with reference to our results preview on 4 Apr (link).

Post-results and briefing, we lift FY24-26E earnings forecasts by +37%/+26%/+14% after raising our LME aluminium spot price assumptions to USD2,500/2,500/2,440/t and updating PMETAL’s hedging ratios of 30% @ USD2,600 for FY24E, 30% @ USD2,650 for FY25E and 25% @ USD2,700 for
FY26E.

We tactically upgrade PMETAL to BUY with a higher TP of MYR6.10 (from MYR4.84), pegged to an unchanged PER of 25x on FY25E EPS.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/384536.pdf

[winston]

not vested

A share swap agreement to enhance tax efficiency
A share swap agreement; maintain BUY @ MYR6.10 TP

Overnight (20 Jun 2024), PMETAL proposed to undertake a share swap, where PMETAL will divest its entire direct 25% stake in PT Bintan to HK Prime Aluminium Investment (a 100%-subsidiary of Nanshan Aluminium) for a 25.59% stake in Nanshan Aluminium, worth about USD329.8m each.

We are neutral on this development. No change to our earnings estimates.

We maintain a BUY on PMETAL with an unchanged TP of MYR6.10, pegged to 25x FY25E PER.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/388270.pdf