Press Metal / Koon Poh Keong

[winston]

not vested

Press Metal Aluminium Holdings (PMAH MK)

Vertical Expansion For Prolonged Multi-year Growth

While horizontal expansion remains constrained by the difficulty of securing additional power supply, we note that PMETAL is pursuing vertical growth through the:
a) development of a new alumina refinery in Indonesia,
b) listing of PT Bintan to enable further capacity expansion, and
c) expansion of VAP production for margin enhancement.

We upgrade our 2025-26 earnings estimates by 12% and 17%.

Maintain BUY with a higher target price of RM7.00.

Source: UOBKH

https://39646150.fs1.hubspotusercontent ... (PMAH%20MK)%20241210.pdf?utm_medium=email&_hsenc=p2ANqtz--OUBl6u8xvNKm-9g0tQK6uIR_mcDHPTY4SW99zfqTXCcmus7AnQzvDLPbLThXo7wwNvuPB-cI2OYfDlCRwz4sveh6Vyg&_hsmi=337795779&utm_content=337795779&utm_source=hs_email

[winston]

not vested

Press Metal to gain from China alumina supply

UOB Kay Hian (UOBKH) Research said in a report that demand from China, which accounts for over half of the global demand, would significantly boost global aluminium consumption, driven by government stimulus.

It said alumina prices were expected to ease this year from new capacity from China, India, Guinea and Indonesia coming onstream and significantly boosting global supply.

“Additionally, the resumption of Rio Tinto’s Australian refineries in early-2025 is likely to alleviate the current supply tightness,” it noted.

It said the surge in demand for value-added aluminium products in the third quarter ended Sept 30, 2024 resulting in value-added product volume growing to half of the company’s total sales has prompted it to augment capacity for such products by 100,000 tonnes.

Currently, value-added product capacity stood at 61% of the company’s total smelting capacity. The most substantial demand surge by product category were from wire rods and billets.

Source: The Star

https://www.thestar.com.my/business/bus ... ina-supply

[winston]

not vested

4Q24 Weakness Expected; Focus Remains On Long-term Vertical Growth

While 4Q24 results are expected to be weaker sequentially due to a fire and higher alumina costs, PMETAL remains committed to long-term vertical growth.

Key initiatives include:
a) developing a new alumina refinery in Indonesia to strengthen supply integration;
b) listing associate Bintan to secure funding for further capacity expansion; and
c) expanding VAP production to enhance margins and profitability.

Maintain BUY with an unchanged target price of RM7.00.

Source: UOBKH

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

[winston]

not vested

Press Metal fourth-quarter earnings likely to soften

Affin Hwang Investment Bank Research (Affin Hwang) foresees the results to come in within the RM340mil to RM440mil range, as high alumina prices are expected to average at 27% of aluminium prices as opposed to the historical average of 17%.

Citing Bloomberg, the research house foresees that the global aluminium market may see a deficit as the demand growth rate outpaces output growth.

Aluminium demand is expected to weaken by 2.9%, driven by China’s slower consumption growth as well as Europe’s continuous subdued demand as automotive original equipment manufacturers or OEMs cut production.

On the supply side, China’s aluminium output nears its 45 tonne annual capacity following strong hydro-powered operations, while delays in new plants in Indonesia and India limit global production growth.

Source: The Star

https://www.thestar.com.my/business/bus ... -to-soften

[winston]

not vested

Press Metal earnings expected to soar in 2026

Expected to turn in higher core earnings of RM500mil to RM600mil for its upcoming third quarter 2025 (3Q25), driven by improved aluminium prices.

Despite expectation of a relatively stronger Malaysian ringgit against the US dollar.

Aluminium prices increasing 8% q-o-q, alumina prices flattish q-o-q and carbon anode prices decreased 5% q-o-q.

The downside risks cited to its call include lower-than-expected global aluminium demand, stronger-than-expected ringgit versus the dollar and higher-than-expected raw material costs.

Source: The Star

https://www.thestar.com.my/business/bus ... ar-in-2026

[winston]

not vested

8869 PMETAL (BUY)
On track for a record FY26

Current LME aluminium prices have surged above the USD2,800/MT level (the highest since 2022).

On the other hand, alumina prices remain soft, keeping the aluminium-alumina cost ratio at a favourable range, compared to a normalised 14-17% level.

Operational momentum remains intact, with PMETAL on track to lift VAP contribution to c.50–60% by FY26f, and progress at PT Bintan and PT Kan supporting rising alumina self-sufficiency over the next two years.

Against this backdrop, we believe PMETAL is on track to deliver record earnings in FY26f.

We revise our FY25f-27f earnings forecast by 8.5%/15.7%/2.2% to reflect a higher LME aluminium price assumption of USD2,625–2,750/MT (from USD2,550-2,650/MT previously) and lower alumina cost.

Maintain BUY call with a higher TP of RM7.64 (from RM7.11) based on 25x FY26f PE.

Source: HLIB

[winston]

not vested

Press Metal earnings outlook bright thanks to hedging

Hedged 40% of its alumina supply this year at 14% to 15% of spot aluminium prices.

“Press Metal’s upcoming results for the fourth quarter of last year (4Q25) are expected to come in at all-time-high of RM600mil to RM650mil compared with 3Q25, driven by improved aluminium prices and alumina prices remaining subdued,” the research house noted.

Press Metal’s quarter-on-quarter (q-o-q) improvement is premised on aluminium prices increasing 8% q-o-q and alumina prices falling 11% q-o-q.

Source: The Star

https://www.thestar.com.my/business/bus ... to-hedging

[winston]

Temporary upside from war premium

War premium offers near term earnings upside

We maintain our forecasts, TP of MYR7.50, and HOLD on PMAH.

While the ongoing Middle East conflict introduces a positive war premium for aluminium prices, we believe any share price impact on PMAH is likely temporary.

On 3 Mar 2026, Norsk Hydro announced a controlled shutdown of its aluminium JV in Qatar amid escalating tensions.

The Middle East accounts for c.8% of global aluminium capacity, although Qatar itself represents <1%.

Based on our sensitivity analysis, every USD100 increase in aluminium prices lifts PMAH’s revenue by c.3%, but contributes <1% to net profit.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/519340.pdf

[winston]

not vested

Bullish outlook for aluminium to benefit Press Metal

The conflict in the Middle East has led to supply disruption concerns in the aluminium market, raising the likelihood of the global market shifting from a modest surplus of the metal in 2025 to a deficit in 2026.

Aluminium prices have risen to above US$3,400 per tonne and up 11% since the start of the Iran war on Feb 28.

Smelters in the Middle East typically only hold one month of alumina raw material inventory.

A disruption to the Strait of Hormuz lasting more than one month could result in a deficit of up to 2.29 million tonnes, driven by logistical constraints that effectively strand Gulf exports, with smelter restart cycles estimated at three to six months.

Markets, including the European Union and the United States, source aluminium from the region.

The company had hedged around 65% of its aluminium output at US$2,750 to US$2,800 per tonne, providing earnings visibility.

Source: The Star

https://www.thestar.com.my/business/bus ... ress-metal