PETALING JAYA: Press Metal
Aluminium Holdings Bhd will likely book stronger quarter-on-quarter earnings for its second quarter of financial year ending Dec 31, 2025 (2Q25), mainly driven by moderating alumina prices – although this may be offset by a lower London Metal Exchange (LME) average selling price.
RHB Research said in a note yesterday that it liked the company for its low-cost structure, vertical integration and growing share of value-added products that command higher margins.
It said it expects the company, which will announce its 2Q25 results soon – to report core profit after tax of RM480mil-RM520mil, albeit below its estimates – mainly driven by the alumina price easing.
The research house said while the recent 90-day delay in the US tariff escalation against China does not directly impact Press Metal, it should alleviate near-term downside risks to China’s economy and industrial demand.
Since China consumes 55% to 60% of the world’s aluminium, the delay should lend support to LME prices moving forward.
RHB Research also said the tariff delay may result in a stronger ringgit, which is a slight negative, in its view, as over 90% of Press Metal’s products are exported.
“Based on our sensitivity analysis, a 2% appreciation in the ringgit could lower earnings by an estimated 5%, assuming no hedging is done,” said RHB Research.
For the rest of 2025, RHB Research expects aluminium prices to be relatively stable, supported by subsiding geopolitical uncertainties.
“As such, we maintain our 2025 LME aluminium price at US$2,500 per tonne.
Global production remains subdued (1% year-on-year in the first half of financial year 2025), as China nears its 45 million tonne production cap.”
Outside China, new capacity is limited, especially in the United States, where smelters face rising competition for electricity from data centres, fuelling the “aluminium versus artificial intelligence” debate, it added.
RHB Research said all in, it has cut financial year 2025 (FY25) to FY27 earnings by 11%, 9% and 11% respectively after accounting for foreign exchange assumptions and depreciation rates as well as tweaking alumina cost assumptions slightly by 3%, to be more conservative.
“We maintain our assumptions for LME and carbon anode prices, for now,” it said, adding that its new target price for the stock was RM6.26.
At last look, the stock was trading at RM5.62 apiece, valuing the whole company at over RM46bil.