PETALING JAYA: ACE Market-bound AMS Advanced Material Bhd (AMSB) is poised to benefit from sustained semiconductor demand driven by artificial intelligence (AI), cloud-related demand and increasing adoption of lightweight materials in aerospace and automotive industries.
TA Research said in a report that resilient domestic construction activity is also expected to support steady demand for the one-stop aluminium products supplier.
Overall, this will position AMSB to deliver sustainable earnings growth, supported by diversified end-market exposure and strong aluminium products demand tailwinds.
Looking ahead, TA Research projects the group to register year-on-year earnings growth of 28.5%, 18.4%, and 18.4% to RM11.5mil, RM13.6mil, and RM16.1mil for financial year (FY) 2026, FY27, and FY28 respectively.
This growth is mainly driven by assumptions, specifically an annual revenue growth rate of 20% across both the trading and processing of aluminium products segments and core net margin assumptions of 7.4%, 7.3% and 7.2% for FY26, FY27 and FY28 respectively.
As at end-FY25, the group’s revenue was led by the semiconductor and engineering support segment (36.9%), followed by aerospace (21%) and construction (17.5%), indicating its strong exposure to high-growth sectors.
According to the research house, AMSB has outlined multiple expansion initiatives including a new distribution point in Kuantan, Pahang, expansion into manufacturing and trading of aluminium architectural products, and plans to set up a new licensed manufacturing warehouse facility in Penang.
Meanwhile, AMSB’s initial public offering (IPO) entails a public issue of 113 million new ordinary shares and an offer for sale of 47 million shares at an IPO price of 29 sen per share, representing 26.1% of the group’s enlarged issued share capital.
TA Research noted that AMSB is valued at 19.8 times its FY25 earnings per share (EPS), which “we view as rich relative to its downstream peers”.
In the absence of directly comparable Bursa-listed peers, the research house benchmarked AMSB against profitable aluminium-related players within the downstream segments such as LB Aluminium Bhd
and Winstar Capital Bhd, while excluding upstream-focused players such as Press Metal Aluminium Holdings Bhd and A-Rank Bhd and integrated players such as PA Resources Bhd.
Based on this, TA Research derived a fair value of 27 sen per share by applying a target price-to-earnings ratio (PER) of 12 times to its 2027 EPS – representing a 25% premium to its peers’ average PER of 9.5 times.
The valuation premium is premised on AMSB’s exposure to higher-growth end-markets, particularly the semiconductor and engineering support industries, which command better margins and offer stronger earnings visibility, the research house added.
