PETALING JAYA: Press Metal
Aluminium Holdings Bhd has no intention of opening a factory in India despite the world’s most populous nation being a “bright spot” market for its solar extrusion products.
Hong Leong Investment Bank (HLIB) Research said the aluminium producer cited a significant “gap in efficiency and product quality” compared with its existing operations outside of India.
“Imported products, particularly from China, remain more cost-competitive than domestic production in India, reducing the commercial viability of local expansion at this stage,” HLIB Research said.
India is one of Press Metal’s core export markets for solar extrusion products, supported by strong structural demand and the country’s continued reliance on imported solar frames, according to the research house.
The research house noted that Press Metal is on track to deliver its strongest-ever profits amid high aluminium prices and foreign expansions.
It has revised its earnings forecast upward by 8.5% for financial year 2025 (FY25) and 15.7% for financial year 2026 (FY26).
Although London Metal Exchange aluminium prices had strengthened to US$2,800 per tonne – the highest level since 2022 – the current low alumina prices serve as a favourable factor for Press Metal.
HLIB Research indicated that this would provide a meaningful cost tailwind heading into FY26.
The research house maintained its “buy” call on Press Metal but raised its target price to RM7.64 from RM7.11.
This is based on its five-year historical mean price-to-earnings multiple of 25 times on FY26 earnings per share, according to HLIB Research.
It expected aluminium prices to remain resilient, underpinned by persistent supply tightness, while easing alumina input costs would provide an incremental margin tailwind.
HLIB Research noted that value-added product contributions are on track to deliver a 50% to 60% increase in FY26, and progress at PT Bintan and PT Kan is driving rising alumina self-sufficiency over the next two years.
The aluminium deficit is further expected to continue next year, the highest since 2022 due to the tightening supply backdrop.
HLIB Research forecast consistency throughout 2026, adding that China’s aluminium production capacity rose to 45.84 million tonnes in September.
As result, China planned to expand into Indonesia despite the South-East Asian country’s limited power availability.
