KUALA LUMPUR (Feb 27): Press Metal Aluminium Holdings Bhd (KL:PMETAL) shares rose on Thursday and are set to snap a four-day losing streak after the smelter’s results came in slightly above consensus.

Shares of Press Metal rose as much as 3% or 15 sen to RM5.15 within the first 30 minutes after trading began. The counter then eased to RM5.13 at 10am, giving the company a market capitalisation of RM42 billion. Trading volume totalled 847,300 shares so far.

Lower cost of alumina, the key raw material used in aluminium production, is expected to boost margin, analysts said. Global demand, meanwhile, remains robust for the lightweight metal widely used in food packaging, aircraft components, and automotive parts.

“Following a record year in FY2024, we expect the group to register further earnings growth” in 2025, said Hong Leong Investment Bank, which kept the stock on ‘buy’ call.

Alumina prices declined by 28% so far this year to US$485 (RM2,154) per tonne from their peak in December 2024 when bauxite supplies out of Australia, Guinea and Brazil were disrupted.

Thursday’s rise in Press Metal's share price lifted the year-to-date gain to about 5%, and the consensus appears broadly bullish on further upside.

There are now 13 ‘buy’, one ‘hold’ and no ‘sell’ calls among the research houses covering Press Metal. The average target price is RM6.22, according to Bloomberg, indicating a potential return of up to 21% over the next 12 months.

“Looking ahead, we expect alumina prices to continue easing in 2025 as production capacity ramps up in Indonesia,” said RHB Investment Bank, which also maintained its ‘buy’ call on Press Metal.

While aluminium prices have been stable, there is more upside potential as China — the largest aluminium producer in the world — has limited room to increase its production being close to the annual capacity cap, the research house noted.

Press Metal, the largest aluminium smelter in Southeast Asia by capacity, saw its net profit jump 39% to RM445.27 million in the fourth quarter ended Dec 31, 2024 (4QFY2024). Full-year net profit was up 45% to a new all-time high of RM1.76 billion.

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