The New Year 2025 is expected to deliver strong financial and operational performance for Press Metal Aluminium Holdings Berhad, a Malaysia-based aluminium company with extensive global reach, thanks to the rising demand from China and reduced raw material costs due to increased alumina supply.
According to a report from UOB Kay Hian (UOBKH) Research, the resurgence in aluminium demand from China due to the economic stimulus package is set to substantially boost aluminium consumption, including that from Press Metal, leading to estimated business growth. Projected alumina price ease in the near future owing to increased supply from the resumption of Rio Tinto’s Australian refineries and new capacities in China, India, Guinea, and Indonesia will also support Press Metal’s profitability.
Projecting business growth for Press Metal, the research house has recommended a “buy” call with a target price of RM6.30 based on 28 times 2025 forward price earnings.
The investment firm highlighted the demand surge for value-added aluminium products, especially for wire rods and billets, also drove Press Metal’s sales, promoting the company to augment the production capacity of such products by 100,000 tonnes.
“With the expansion plan in motion, we anticipate value-added product volume to reach at least 60% of the company’s total sales volume by end-2025,” said Press Metal.
The Malaysian aluminium company will also have a secured alumina supply from its strategic joint venture with Indonesian parties signed in September 2024. The joint venture will set up an integrated refinery worth RM238bil with an initial capacity of 1 to 1.2 million tonnes.
Edited By: Debanjali Sengupta
