PETALING JAYA: Kenanga Research sees AMS Bhd as an underappreciated beneficiary of the global semiconductor equipment upcycle, saying the aluminium products supplier is well positioned for sustained earnings growth as wafer fabrication equipment (WFE) spending accelerates over the next two years.
It initiated a coverage on the company with a fair value of 62 sen, noting AMS’ growing exposure to the semiconductor supply chain since its listing.
“We believe the market has yet to fully price in this transformation, hence we see meaningful catch-up potential as AMS’ semiconductor business continues to scale.”
It expects its revenue to expand by 17% in the financial year ending September 2026 (FY26) and 20% in FY27, while net profit is projected to surge by 49% and 60% respectively.
The forecasts are underpinned by stronger demand from semiconductor customers, rising contributions from value-added processing services and improving profit margins.
Kenanga Research said the outlook is supported by a strengthening global semiconductor capital expenditure cycle, particularly outside China, driven by artificial intelligence-(AI) related investments.
“We believe 2026 marks the inflection point for the WFE cycle, with ex-China WFE spending forecast to grow 36% and 33% in 2026 and 2027 respectively, as new fabs commence production,” it said.
Rather than supplying semiconductor manufacturers directly, AMS sits upstream in the production chain by supplying semi-finished aluminium products to precision engineering companies that manufacture components for leading WFE makers.
This positioning allows the company to benefit from rising equipment demand regardless of which global chipmaker or equipment manufacturer ultimately wins new orders.
Kenanga Research said AMS has developed relationships with major precision engineering companies in Penang, serving multinational corporations and local firms involved in semiconductor equipment manufacturing.
The research house found AMS has become a preferred supplier because of its broad aluminium product range and processing capabilities, which enable customers to focus on higher-value precision machining work.
It also noted the company’s semiconductor-related business has expanded rapidly over the past few years and it is expected to become an increasingly important earnings driver.
Semiconductor-related revenue is forecast to account for 46% of AMS’ total revenue in FY26 before rising to 55% in FY27, up from 37% in FY25.
Since its April 2026 listing, AMS has continued expanding production capacity to support growing demand.
Kenanga Research said the company’s Penang facility has its first production shift fully booked through year-end, while a second shift began operations in July.
Meanwhile, its Johor plant is expected to reach full utilisation by the fourth quarter of calendar year 2026.
Kenanga Research pointed out that AMS has also secured qualification from a leading global aluminium rolling mill, with commercial production expected to begin in September 2026.
This is expected to broaden its addressable market by allowing the group to supply additional semiconductor precision engineering customers that require materials sourced from approved rolling mills.
Every additional US$100bil of AI-related capital expenditure translates into roughly US$8bil of additional WFE spending, creating favourable conditions for upstream suppliers such as AMS.
Beyond semiconductor demand, Kenanga believes AMS differentiates itself from conventional aluminium distributors through its value-added processing services, including cutting, shearing and basic machining, allowing customers to receive materials closer to production-ready specifications.
Despite the company’s share price rising about 43% since its initial public offering, Kenanga believes the stock continues to trade at an attractive valuation relative to peers and retains room for further rerating as its semiconductor business expands.
