KUALA LUMPUR (Feb 14): Kenanga Research has maintained its “outperform” rating on Press Metal Aluminium Holdings Bhd at RM5.15 with a higher target price of RM6.30 (from RM5.50) and said that year-to-date, aluminium prices have risen 6% to above US$2,500/MT, buoyed by the reopening of China which is the largest global aluminium consumer.

“While maintaining our FY2022 forecasts (average aluminium price assumption of US$2,400/MT), we raise our FY2023 earnings forecast by 7%, imputing a higher average aluminium price assumption of US$2,550/MT (from US$2,500/MT previously).

“Hence, we also lift our TP by 15% to RM6.30 (from RM5.50). We maintain 'outperform',” it said.

Kenanga said the risks to its recommendation include: i) a global recession resulting in a sharp fall in demand for aluminium, hurting prices; ii) an escalation of raw material prices; and iii) major plant disruptions/closures.