PETALING JAYA: Supply constraints, easing input costs, and a low-carbon advantage continue to be key drivers for Press Metal
Aluminium Holdings Bhd.
Maybank Investment Bank (Maybank IB) Research reiterated its “buy” call on Press Metal, raising its target price (TP) by 12% to RM6.34 a share from RM5.64, based on 25 times financial year ending Dec 31, 2026 (FY26) earnings.
“We remain positive on Press Metal’s outlook, underpinned by tight aluminium supply and its low-carbon advantage from hydropower,” it noted.
The research house said plant utilisation improved to 96% to 97% in the second quarter of 2025 (2Q25) as operations at Samalaju, previously hit by a fire in September 2024, were fully restored in March 2025.
While demand may be weighed by geopolitical risks, Maybank IB Research said slower supply growth of 1% to 1.5% in 2025 versus 3.2% in 2024 could support prices.
It added that Press Metal has hedged about 60% of its FY25 sales at US$2,600 per tonne, 45% of FY26 at US$2,650, 35% of FY27 at US$2,700, and 20% of FY28 at US$2,750.
RHB Research also kept its “buy” rating with an unchanged TP of RM6.26, expecting a seasonally stronger second half of 2025 on the back of softer alumina prices and stabilising London Metal Exchange (LME) prices.
Still, it cautioned that high inventory costs, global uncertainties, and lower associate contributions could weigh on earnings.
It added that the US-China tariff delay on Aug 12 should underpin LME prices, with demand supported by China’s 15% rise in aluminium imports in the first seven months of 2025, driven by strong electric vehicle sales, which consume 20–25% more aluminium than internal combustion engine vehicles.
It said alumina prices have eased to US$370 per tonne compared to US$650 in January, lowering the alumina/aluminium ratio to 14% from a peak of 25% earlier this year.
“Moving forward, management expects alumina prices to remain soft, supported by higher bauxite exports to China (up 36% year-on-year in 1H25) and the start-up new refinery capacity including Press Metal’s third one-million-tonne line, which commenced operations in July,” it said.
RHB highlighted that Press Metal trades at “an attractive valuation” of 22 times FY26 forward earnings, below its five-year average of 24 times.
