MBSB Investment Bank Bhd (MBSB Research) has initiated coverage on Press Metal Aluminium Holdings with a BUY rating and a target price of RM9.78, highlighting expected margin expansion, upstream integration benefits and structural demand growth in aluminium, while also noting easing cost pressures and favourable pricing assumptions that support earnings visibility and a potential re-rating of the stock.
The research house said Press Metal’s earnings outlook is supported by a de-risked operating model and strong cost leadership, underpinned by revenue hedging, stable production output and a consistent regulatory environment. It added that the group is increasingly shifting towards value-added products such as billets, wire rods and foundry alloys, which already accounted for 47% of sales volume in FY25, improving earnings quality and reducing exposure to aluminium price volatility.
MBSB Research said structural demand for aluminium remains strong, driven by electrification trends, renewable energy expansion, EV adoption and grid infrastructure upgrades. It noted that global supply discipline following China’s 45.5 million tonne aluminium capacity cap has improved industry fundamentals, while low inventories and limited renewable-powered smelting capacity further support a tighter market environment.
The research house forecast core earnings growth of 24.3%, 11.8% and 8.9% over FY26E to FY28F, reaching RM2.67 billion, RM2.98 billion and RM3.25 billion respectively. It said this would be driven by higher realised selling prices, cost moderation and stronger contributions from value-added products, with PATAMI margins expected to expand from 15.3% in FY26E to 16.6% in FY28F.
MBSB Research also noted that easing geopolitical tensions in the Middle East may limit near-term aluminium price upside but said the impact remains manageable. It added that underlying fundamentals remain intact with tight global supply and steady demand growth from energy transition themes.
The research house said Press Metal is positioned to benefit from upstream integration initiatives including alumina supply security and cost stability, while also highlighting potential valuation upside as investors recognise its long-term earnings growth trajectory supported by structurally supportive aluminium market conditions.
As of 11.17 am, Press Metal’s stock price was flat at RM7.68.
