KUALA LUMPUR (April 6): AMS Advanced Material Bhd is heading for an ACE Market listing with a valuation that TA Securities described as "rich" premium compared to its industry peers.
At the initial public offering (IPO) price of 29 sen per share, AMS Advanced Material would be valued at nearly 20 times its trailing earnings, more than double that of its profitable peers in the aluminium downstream segments, TA Securities said in an unrated note.
“We view the IPO valuation as rich relative to its peers,” TA Securities flagged.
Applications for the IPO will close on April 10, and listing has been scheduled for April 23.
Based in Penang, AMS Advanced Material is mainly involved in the trading of semi-finished aluminium and copper products, as well as the processing of semi-finished aluminium products.
The IPO will raise about RM32.8 million for the company and another RM13.6 million for a private vehicle controlled by AMS Advanced Material managing director Keh Teng Yang, according to its official prospectus.
The fair value for AMS Advanced Material should be 27 sen per share, according to TA Securities, but still about 25% premium to its peers’ average multiple of 9.5 times their earnings.
“The valuation premium is premised on exposure to higher-growth end-markets, particularly the semiconductor and engineering support industries, which command better margins and offer stronger earnings visibility,” the research house said.
TA Securities is projecting an earnings growth of 29% to RM11.5 million for the current financial year but flagged key risks that include slowdown in semiconductor and electronics system integration sector activity, as well as fluctuations in aluminium raw material prices.
The IPO will offer investors up to a 31% stake in AMS Advanced Material, which made a net profit of RM8.57 million on revenue of RM129.7 million in the 12 months ended September 2025. Based on its IPO price, the company is expected to have a market capitalisation of RM177 million upon listing.