PETALING JAYA: Press Metal
Aluminium Holdings Bhd is expected to turn in higher core earnings of RM500mil to RM600mil for its upcoming third quarter 2025 (3Q25), driven by improved aluminium prices.
Affin Hwang Investment Bank Research expects Press Metal to register new all-time-high earnings in financial year 2026 (FY26) despite the expectation of a relatively stronger Malaysian ringgit against the US dollar.
It raised its FY25 to FY27 earnings by 9% to 16% to reflect changes in its price assumptions, which have led to more favourable spreads, despite a stronger ringgit against the dollar.
In 2Q25, Press Metal turned in RM509mil in core earnings.
Affin Hwang Research said this would represent another quarter of quarter-on-quarter (q-o-q) improvement, premised upon improved spreads with aluminium prices increasing 8% q-o-q, alumina prices flattish q-o-q and carbon anode prices decreased 5% q-o-q.
This trend continued through October to November with alumina prices now forming only 11% of aluminium prices.
It also raised its 2025 to 2027 earnings per share (EPS).
It also lifted its target price to RM7.40 a share from RM6.40 a share, based on an unchanged past-five-year mean price-to-earnings ratio multiple of 24 times applied to its 2026 EPS.
The research house has retained its “buy” call.
The downside risks cited to its call include lower-than-expected global aluminium demand, stronger-than-expected ringgit versus the dollar and higher-than-expected raw material costs.
Affin Hwang Research is optimistic about the company’s prospects due to favourable aluminium prices and easing alumina prices as global supply increases.
Based on its estimates, the group’s earnings are sensitive to changes in aluminium prices.
On global demand, the research house said growth is expected to moderate to 2.2% against 2.4% this year, largely from China’s decrease in consumption, which accounts for the bulk of global consumption.
On the flip side, global supply is expected to increase by only 2.3% in 2026, as China’s output growth will likely be limited at about 0.5% as it nears its production cap.
The increase will be largely driven by new capacity in Indonesia and a potential ramp-up in Europe.