KUALA LUMPUR (July 6): AMS Advanced Material Bhd (KL:AMS) extended its gain sharply on Monday to a new all-time high as an analyst flagged the aluminium company’s rising semiconductor exposure.

The company is backed by strong order momentum, capacity expansion and deepening penetration into the semiconductor space, Kenanga Investment Bank said in an unrated report. Despite a rally since its listing three months ago, the stock still trails its precision engineering peers, the house noted.

“We believe the market has yet to fully price in this transformation, hence we see meaningful catch-up potential as AMS' semiconductor business continues to scale,” Kenanga said.

Shares of AMS climbed as much as 9.5 sen or 23% to 51 sen — its intraday high — before settling at 46 sen, still up 10.8%, after more than 30.28 million shares changed hands. The last price valued the company at RM281.5 million.

In response to a query from The Edge, AMS managing director Keh Teng Yang said the share price hike could be attributed to investors seeing the group as “a proxy or a beneficiary of semiconductor WFE [water fabrication equipment] demand surge”. He estimated the surge could last for over 18 months. 

AMS, which mainly supplies semi-finished aluminium products such as sheets and plates, has racked up a 60% gain from its initial public offering since its debut while its peers have risen an average 90% year to date. Listed on the ACE Market, the company does not have regular analyst coverage.

The fair value for the company, positioned to benefit from the global semiconductor cycle through its role as an aluminium supplier to Malaysia’s semiconductor ecosystem, should be at 62 sen, Kenanga said.

Revenue from semiconductor clients which accounted for a little over one-third of its total revenue for the financial year ended Sept 30, 2025 (FY2025) could hit 55% in FY2027, according to the research house’s estimates.

“AMS offers an alternative way to participate in the semiconductor equipment upcycle as a preferred aluminium supplier to Malaysia's semiconductor precision engineering ecosystem,” the house said.

Kenanga pointed out that parts of AMS’ Penang facility are already operating near full first-shift utilisation, with a second shift starting mid-year, while its Johor capacity is expected to ramp up further towards full utilisation over the next year.

All in all, net profit at AMS is expected to expand 49% for the financial year ending Sept 30, 2026 (FY2026) and 60% in FY2027, according to Kenanga’s forecast.