Can Press Metal continue with this robust output and stellar earnings? According the MBSB based on the situation of global aluminum demand and disruption in Middle East the answer could likely be a resounding yes.
The house has maintained its BUY call with an unchanged target price of RM9.56, saying tight global aluminium supply should keep the smelter’s earnings outlook supported in the second half of FY2026.
MBSB said the company’s 2QFY26 core net profit rose 42% year-on-year and 10% quarter-on-quarter to RM685.6 million, while revenue increased 11.9% year-on-year to RM4.69 billion, driven by stronger realised aluminium prices and higher value-added product (VAP) sales. Reported PATAMI climbed 65.6% to RM801 million.
It noted that VAP accounted for 57% of sales volume, up from 46% a year earlier, with another 180,000 tonnes per annum of capacity targeted for commissioning in 4QCY26. This could bring VAP capacity to around 75% of total production.
For the second half, MBSB expects physical supply tightness to support smelting margins. Global primary aluminium production fell 2% quarter-on-quarter in 2QFY26, while Middle East output plunged 42% year-on-year. Management expects around two million tonnes of disrupted Gulf supply to take six to 12 months to fully return.
Meanwhile, LME inventories have fallen to around 245,000 tonnes, a 36-year low, reinforcing the supply constraints.
MBSB also highlighted PT KAN’s progress, with Phase 1 of its 1.0 million tonne per annum alumina facility on track for commissioning in 1HFY27. Full self-sufficiency is expected by end-FY27, potentially improving cost control and smelting margins.
As of 2.50 pm, the stock price dipped 0.37% to RM7.98.
