KUALA LUMPUR (April 9): Malacca Securities has assigned a fair value of 38 sen per share to ACE Market-bound AMS Advanced Material Bhd, implying an upside 31% from its initial public offering (IPO) price of 29 sen per share.
The producer of semi-finished aluminium and copper products could post a three-year earnings compound annual growth rate (CAGR) of 20.8%, Malacca Securities said, backed by its Penang manufacturing expansion, venture into higher-margin products and diversification into scrap recycling for exports to China.
AMS' expansion of its licensed manufacturing warehouse (LMW) plant in Penang is expected to drive stronger revenue growth in the processing segment by tapping into Malaysia’s semiconductor supercycle, Malacca Securities said in a research note.
As the nation's premier chip hub, Penang accounted for approximately 36% of national exports in 2025.
"The new plant will further cement AMS's position as a preferred local supplier to export-oriented manufacturers," Malacca Securities noted.
AMS is also diversifying into manufacturing of high-end aluminium architectural products from the second half of 2026, such as designer ceilings and façade systems.
These premium, anodised finishes are expected to offer superior margins compared to raw profiles, Malacca Securities said.
Additionally, its subsidiary, AMS Ecogreen, will venture into aluminium scrap recycling, collecting material from its existing customer base for export to China — the world’s largest consumer of recycled aluminium.
AMS plans to utilise its listing proceeds of RM32.8 million to fund the Penang LMW plant, establish a new distribution point in Kuantan, and launch its architectural and recycling ventures.
Remaining funds are earmarked for loan repayments, working capital, and listing expenses.
The company is set for listing on April 23, with an enlarged market capitalisation of RM177 million.
Malacca Securities anticipates AMS' core profit after tax and minority interest (Patmi) to rise to RM15.1 million over the next three years.
The outlook is also supported by niche positioning to ride the aerospace sector upcycles, supported by strong exposure to engineering support industries and the company's diversification into the aluminium architectural industry.
Still, the research house flagged key risks, including dependency on one major customer, absence of long-term contracts, dependency on major suppliers, fluctuation of foreign exchange and global market prices of aluminium and copper.