PETALING JAYA: AMS Advanced Material Bhd’s upcoming initial public offering (IPO) at 29 sen a share presents a compelling opportunity for investors seeking a high-growth precision aluminium proxy for the semiconductor sector.
RHB Research has a research-backed fair value of 34 sen on the stock, while Apex Securities has a target price of 33 sen, offering a potential 17% upside from its listing price.
RHB’s valuation is based on 14 times AMS’s financial year 2027 (FY27) price earnings (PE) multiple, which reflects a minus one standard deviation or SD discount to the 10-year forward P/E mean of the Bursa Malaysia Industrial Production Index.
Apex Securities valued AMS at a 14 times P/E multiple derived from a 5% premium to the simple average forward P/E of 13.3 times from a group of selected listed peers.
“It (AMS) is well-positioned to benefit from the recovery of the semiconductor industry.
“This is underpinned by stronger chip sales, renewed wafer fabrication equipment spending, and higher demand for precision aluminium materials.
“With the semiconductor industry set to contribute a larger and higher-margin share of earnings, its IPO valuation of 12 times the forecast FY27 P/E is undemanding,” RHB research stated in an IPO note.
It added the primary catalyst to consider AMS is the company’s successful vertical expansion into processing semi-finished aluminium, which has transformed its financial profile.
This shift allowed AMS to achieve a robust three-year revenue compounded annual growth rate (CAGR) of 28% through FY25.
Specifically, the semiconductor segment – now the company’s largest at 37% of revenue – saw a roughly nine-fold surge in sales following the move into value-added processing.
With a track record spanning more than two decades, AMS is an established provider of semi-finished aluminium and copper products. It is currently executing a strategic shift toward value-added precision processing to serve the high-growth semiconductor and engineering support industries (ESI), Apex Securities added.
“We forecast a net profit CAGR of 28% between FY25 and FY28, driven by a structural shift toward high-complexity processing works that are projected to expand core profit after tax and minority interest margins to 8.3% by FY28,” the research firm noted in its report on AMS.
Apex Securities added the AMS Group is forecast to achieve a net cash position in FY26 following the IPO, thus strengthening its balance sheet capacity to finance strategic initiatives.
These include the establishment of a new Licensed Manufacturing Warehouse (LMW) in Penang and entry into the sustainable, high-margin aluminium scrap segment by the first half of 2026.
AMS plans to use a portion of its RM32.8mil IPO proceeds to establish the new 20,000 sq ft LMW in Penang.
This facility is specifically aimed at serving front-end semiconductor testing equipment makers, which is expected to drive the next phase of revenue growth.
RHB Research added AMS’s “cost-plus” model further protects its bottom line by allowing the company to pass changes in raw material prices directly to customers.
AMS is scheduled to list on the ACE Market on April 23, 2026.
