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