PETALING JAYA: Net profit margins for Press Metal
Aluminium Holdings Bhd are expected to expand from 15.3% in financial year 2026 (FY26) to 16.6% by FY28 based on a forecast.
MBSB Research anticipates this on a more favourable product mix and the gradual benefits of upstream integration.
The research house initiated coverage on Press Metal with a “buy” recommendation and a target price of RM9.78 per share, citing the group’s low-cost renewable- powered smelting operations, expanding upstream presence and structural exposure to global electrification trends.
MBSB Research said Press Metal is among the few aluminium producers globally that combine renewable hydropower, deepening vertical integration and structural demand drivers within a single platform.
Unlike many global peers that remain exposed to volatile fossil fuel-linked energy costs and raw material supply risks, the group benefits from long-term hydropower arrangements in Sarawak and an expanding portfolio of upstream alumina assets in Indonesia.
These advantages have enabled Press Metal to maintain industry-leading profitability across commodity cycles.
It expects the group’s earnings to remain supported by improving aluminium industry fundamentals, including China’s 45.5 million tonne aluminium smelting capacity cap, historically low global inventories and sustained demand growth from electric vehicles, renewable energy infrastructure and power grid expansion.
MBSB Research said Press Metal’s access to competitively priced hydropower at its Samalaju Industrial Park smelters in Sarawak remains one of its strongest competitive advantages.
Electricity accounts for 28% to 30% of aluminium production costs globally, and the group’s renewable energy supply provides stable production costs while supporting lower-carbon aluminium production.
The research house also highlighted Press Metal’s upstream expansion through investments in alumina refining and carbon anode production, including stakes in Nanshan Aluminium International Holdings and PT Kalimantan Alumina Nusantara.
Among these, PT Kalimantan Alumina Nusantara is viewed as the group’s key medium-term growth catalyst, with its first phase expected to commence operations in 2027 and produce one million tonnes of alumina annually.
The management estimates the refinery could supply about 40% of Press Metal’s alumina requirements, improving raw material security while reducing exposure to volatile alumina prices.
