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AmResearch maintains Buy on Press Metal

KUALA LUMPUR: AmResearch has maintained its Buy on Press Metal with a higher fair value of RM3.07 a share from RM2.95.

In a note on Monday, AmResearch said Press Metal is selling a 20% stake of its unit Press Metal Bintulu Sdn Bhd (PMBSB) to Japan-based trading company Sumitomo Corp for a provisional cash consideration of US$140mil (RM444mil).

“The proceeds would be used for repayment of borrowings and working capital. The proposed disposal is expected to result in a net gain of RM336.4mil in FY14F,” it said.

It added the disposal is conditional on PMBSB fulfilling a few operational criteria and subject to certain adjustments up to end-FY18F.

“The maximum adjustment is capped at US$69mil in favour of Press Metal, and US$43mil in favour of Sumitomo by end-FY18F. We have not factored this into our model,” it said.

AmResearch said although the disposal of the 20% stake in PMBSB is earnings dilutive, it is mitigated by lower interest expenses as proceeds will go towards repayment of borrowings.

“Recall that Press Metal is also exiting its loss-making Chinese smelter business via an asset swap. With the sale of PMBSB stake and its exit from the loss-making Chinese smelter business, our FY14F-FY15F earnings have increased by 2% to 4% to RM163mil-RM262mil (from RM156mil-RM256mil previously),” it said.

The research house added it is positive on the disposal as it will help Press Metal to partly realise its investments in the Bintulu plant and reduce gearing, while securing an off-take agreement with Sumitomo.
“While 2HFY13F earnings will be dampened by the shutdown of its Mukah plant, we see a significant earnings boost in FY14F, driven by resumption of Mukah plant operations, full ramp-up of its Bintulu plant; one-off cash compensation for the shutdown of the Mukah plant, gain on disposal of the 20% stake of PMBSB to Sumitomo and exit of its loss-making Chinese upstream operations,” it said.
12 Nov 2013, 09:16 AM

any more news for press metal recently???
18 Jun 2014, 02:27 PM
LME aluminium prices broke the USD2,000/tonne mark last week. While
prices have consolidated, the present level and record premiums are
set to benefit Press Metal’s smelters. We prudently revise upwards our
all-in FY14/FY15 aluminium price estimates to USD2,200/USD2,400
respectively despite the belief that there is more upside coming.
Reiterate BUY, with a higher MYR7.38 FV (from MYR5.47), a 20%
discount to its fully-diluted DCF.

Forecasted eps(FY14)= 40sen while eps(FY15)= 70sen. drool

Source : RHB
31 Jul 2014, 03:10 PM
this week stock to buy, just hentam guys lol
04 Aug 2014, 10:02 AM
Bonus issue of (1:1) may drive the share price up !drool
23 Aug 2014, 03:31 PM
Bonus issue of (1:1) may drive the share price up !drool
23 Aug 2014, 03:31 PM
PMetal is currently trading at FY15 eps=70sen, the trend is going strong, $8.00 is the near-term target ! Retailers may go for its CA, CB & CC! Cheers.drool
08 Sep 2014, 05:32 PM
Riding on aluminium price recovery. We hold a bullish view on aluminium prices, premised on the increasing popularity of aluminium in the auto industry as a steel alternative, growing demand in emerging markets, and declining global production rates. Thus, we expect aluminium prices to increase to an average of USD1900/MT (+3%) in FY14E and USD2100/MT (+11%) in FY15E. Based on our sensitivity analysis, every USD100/MT increase in aluminum prices could directly translate into a 5% increase in Press Metal (PMETAL)’s bottom line. Hence, we believe PMETAL should benefit directly from the higher price trend as 97% of revenue is derived from its Manufacturing & Trading (M&T) division, which sells aluminum ingots, billets and extrusion products.

Margin expansion in M&T division to drive earnings growth. We are expecting M&T division’s margin to expand significantly by 4.5 times to 8.6% (from 1.9% in FY13). Note that the large quantum of growth is due to a low base effect in FY13 as a result of the Mukah plant shutdown which depressed FY13 earnings. Our margin expectation is on the conservative side, as it is similar to the FY12 level of 8.6%, even though margin should see improvement vs. FY12 due to the new and higher energy-efficient Samalaju plant. As for FY15, we expect PBT margin improvement to 9.2% as the Group is embarking on additional logistics upgrades, which should lower average manufacturing cost per MT. Furthermore, the company is targeting to increase its alloyed aluminum production to 40% by FY16E, which commands a better price premium with minimal additional capex. Overall, we expect the margin expansion to flow straight to bottom line as M&T division contributed 97% of PMETAL’s revenue and 99% of PBT in FY13.

Expect FY14E revenue to surge 25% due to capacity expansion. On top of margin expansion, we are also expecting superior revenue growth of 25% to RM3.9b in FY14E on additional capacity expansion. PMETAL has continued to ramp up production at the Samalaju plant by 33% to its full rated capacity of 320k MT/year of aluminum production. We expect the newly-added capacity to boost revenue immediately. This is because each ‘potline’ consists of about 150 aluminium smelting pots which are operated as a batch. The smelting process runs continuously with each pot producing almost 3 MT of aluminium per day. Hence PMETAL’s new expansion should enjoy optimal capacity utilization from the new potline upon commencement of operations. As for FY15E, we expect revenue growth of 16% to RM4.5b, driven mainly by rising aluminium prices and a shift towards value-add alloyed aluminium products, which command a 15-20% price premium above the market price of aluminum.

Sustainable operating margin due to attractive electricity cost. Based on our estimates, PMETAL has a higher-than-average expected FY14E operating margin of 10.8% compared to its regional peers’ average FY14E margin of 4.5%. The margin advantage is due to the attractive electricity costs compared to other aluminium smelters in the region. We expect the high margin trend to be sustainable as the Power Purchase Agreement (PPA) signed between PMETAL and Sarawak Energy (Sesco) in 2011 should be effective for another 22 years. Lastly, we note that PMETAL’s subsidiary Press Metal Bintulu (PMB), which operates the Samalaju smelter, may get an additional 5 years extension for its pioneer status upon expiry in Dec 17 (the current extension started Jan 13).

Trading Buy with a Target Price of RM8.87 based on a target Fwd. P/E of 14.5x on FY15E EPS of 61 sen. Our Fwd. P/E is based on a 5% premium to FBM Mid 70 Index FY15E Fwd. P/E of 13.8x. We believe our benchmark is appropriate as the average FBM Mid 70 (FBM70) market cap of RM4.6b is comparable to PMETAL’s current market cap of RM4.0b. Our premium is justified by strong FY14E-FY15E expected earnings growth of 91%-28%, well exceeding FBM70’s expected 16%-6% growth. At our current TP, we expect a potential total return of 24.1% (21.7% upside, 2.5% dividend yield) which warrants a trading buy recommendation.

Source: Kenangadrool
09 Sep 2014, 08:46 PM
This week we saw "Roller-coastal" ride for PMetal. similarly for its WC & Call-warrants as well. Value re-appears, good rewards for those brave traders.drool
26 Sep 2014, 02:31 PM
8869 pmetal 齐力 rm 3.43 进入--
投资风险相对变小,股价也将呈现上升势头,pmetal 会是不错的选择.
3)目前pmetal的股价=rm3.43 ,只是pe=9.7倍在交易,比较其他工业股后,明显被低估了.
合理的pe=15 ,股价rm5.25.
4)公司nta=rm1.71 ,2014年eps=rm0.35 ,铝业生产业务成长良好,股价rm3.43 是吸引人的投资机会.
10 Mar 2015, 02:44 PM
PMETAL on high risk area
13 Jul 2016, 11:14 AM

Day 60 of Fundamental Daily, YAPSS will be covering Press Metal Aluminium Holdings Berhad's fundamental via a short animated video. I hope it helps and please enjoy the video, see ya! #YAPSS #FundamentalDaily #PressMetalAluminiumHoldingsBerhad

Click the on the link to find out more:

03 May 2019, 12:17 AM
Muhaimin Sakirin

Kemah Pmetal

28 May 2021, 03:30 AM

Stock Review PMETAL

  • Low revenue and profit margin  in 2019 due to low aluminium price
  • Aluminium price had increase in 2021 Q1 2021 profit margin increase
  • Three operating segment; Smelting and Extrusion, Trading and Refinery
  • Aquisition of raw material production - carbon anode and alumina in 2019 and 2020 (vertical integration)
  • High Debt in 2020
  • High Capital investment in 2019 and 2020
  • Low Dividend Yield
  • High PE
  • Technical shown reversal, currently downward trend support at RM 4.00.
21 Jun 2021, 01:47 PM

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02 Sep 2021, 12:50 PM

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