Hong Leong Investment Bank Bhd (HLIB) has reaffirmed its “BUY” call on Press Metal Aluminium Bhd. The bank raised its target price to MYR 7.64 (USD 1.84), reflecting stronger earnings visibility. The upgrade is driven by robust aluminium prices, favourable alumina costs and steady operational expansions.
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HLIB said Press Metal is on track for record earnings in FY26. It expects higher contributions from value-added products and rising alumina self-sufficiency. Forecasts for FY25-FY27 were revised up by 8.5 per cent, 15.7 per cent and 2.2 per cent, respectively.
Press Metal Aluminium's operational momentum remains strong even though LME aluminium prices have increased above USD 2,800 per tonne, the highest level since 2022. Alumina prices remain subdued. This keeps the aluminium-alumina cost ratio below the normalised 14-17 per cent range. Analysts anticipate aluminium prices to stay in the USD 2,800-2,900 per tonne range through FY26.
The company aims to raise value-added products to 50-60 per cent of sales volume by FY26. This compares with 46.8 per cent achieved in the nine months of FY25. Analysts stated that the group’s operations at PT Bintan and PT Kan will further raise the alumina self-sufficiency over the next two years. PT Bintan’s third 1-million-tonne line is fully operational. A fourth line is planned by FY26. PT Kan’s Phase 1 refinery, targeted for FY27, could lift alumina self-sufficiency to over 90 per cent.
India remains a key market for solar extrusion products. Structural demand remains strong. However, Press Metal has no immediate plans for local manufacturing due to efficiency and quality gaps. Up to 30 per cent of US dollar exposure is hedged, limiting currency volatility.
The stock rose 1.31 per cent to MYR 6.96 (USD 1.71) as of 11.56 am.
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