AMS Advanced Material Bhd, operating in Malaysia and Singapore, a supplier of aluminium sheets, plates, rods and bars and profile extrusion, is now making its way to the ACE Market listing by gaining a valuation which is described as “rich” premium compared to its industry peers by TA Securities.

AMS Advanced Material Bhd, which is ACE Market-bound, will gain major advances from the rising demand for semiconductors, which is fueled by advancements in artificial intelligence (AI), cloud services and the increasing use of lightweight materials in the aerospace and automotive sectors. As per the TA Research report, the surge in activity in domestic construction is expected to boost the steady demand for the one-stop aluminium supplier.

The firm's initial public offering (IPO) price has been set at JPY 29 per share (USD 0.18), where the firm is valued at nearly 20 times its trailing earnings. Moreover, the value is deemed to be more than double that of its profitable competitors within the domestic aluminium downstream sector. This has been noted by the TA Securities in an unrated report.

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TA Securities flagged, "We view the IPO valuation as rich relative to its peers."

The IPO application's deadline is set at April 10 and the final listing will take place on April 23.

According to the official prospectus, with the IPO, the firm will be bringing in RM32.8 million (USD 7.0 million) with an additional RM13.6 million (USD 2.9 million) for the private entity, which is deemed to be run by the firm's Managing Director, Keh Teng Yang.

TA Securities has assessed the fair value of the firm and marked it at JPY 27 per share (USD 0.18), indicating a 25 per cent premium compared to the average earnings multiple of 9.5 times for its peers.

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The research house stated, "The valuation premium is premised on exposure to higher-growth end-markets, particularly the semiconductor and engineering support industries, which command better margins and offer stronger earnings visibility."

As per the projections made by TA Securities, the firm will witness a surge of 29 per cent in its earnings, which will reach RM11.5 million (USD 2.4 million) for this financial year. However, there are certain risks that the firm may pose, likely a possible slowdown in the semiconductor and electronics system integration sector, as well as some disruptions in the aluminium raw material prices.

With the upcoming IPO, the investors can raise their stake in the firm by nearly 31 per cent. The firm's net profit is recorded at RM8.57 million (USD 1.8 million) on a revenue of RM129.7 million (USD 27.5 million) for the year ending September 2025. If the IPO remains at the set price, the firm is expected to reach the market capitalisation of RM177 million (USD 37.5 million) after it goes public.

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There are certain assumptions that are nudging the surge, which include an expected annual revenue growth rate of 20 per cent concerning both the trading and the aluminium products processing segments.

Moreover, the core net margin assumptions are set at 7.4 per cent, 7.3 per cent and 7.2 per cent for FY26, FY27 and FY28, respectively. It has been predicted that by the end of FY25, the firm's revenue will be majorly driven by the semiconductor and engineering support segment, which accounted for 36.9 per cent, followed by aerospace at 21 per cent and construction at 17.5 per cent.

According to the Research House, the firm has several plans for expansion, including a new distribution point in Kuantan, Pahang, moving into the manufacturing and trading of aluminium architectural products and setting up a new licensed manufacturing warehouse facility in Penang.

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