Press Metal Aluminium Shares (PMETAL) Makes New High on Strategic Hedging

Press Metal Aluminium Holdings Bhd shares surged to a new high of MYR7.40 on Wednesday, capping a remarkable 42.86% advance over the past twelve months as markets responded to a confluence of strategic initiatives and favourable industry dynamics.

The milestone comes as the FBMKLCI benchmark index edged 0.4% higher to close at 1,705.81, with the aluminium producer emerging as a standout performer in the Malaysian industrial sector.

The stock's ascent reflects growing market confidence in the company's ability to navigate volatile commodity markets through disciplined risk management. In January 2026, Press Metal disclosed it had secured hedging arrangements covering 40% of its alumina supply for the year at rates equivalent to 14% to 15% of spot aluminium prices. This proactive approach to input cost management positions the company to protect margins even as raw material prices fluctuate, a critical consideration given alumina's significant weighting in production economics.

Analysts have responded enthusiastically to the hedging strategy, with consensus estimates pointing toward fourth-quarter 2025 earnings reaching between RM600 million and RM650 million. If realized, these figures would represent an all-time quarterly high for the company, driven by the favorable combination of elevated aluminium prices and stabilized alumina costs. The earnings trajectory underscores Press Metal's operational leverage to commodity price movements while demonstrating improved downside protection through strategic procurement.

Hong Leong Investment Bank Bhd maintained its BUY recommendation in December 2025, lifting the target price to RM7.64 and highlighting the company's operational expansion initiatives. Press Metal aims to increase value-added products to 50% to 60% of total sales volume by fiscal year 2026, up from 46.8% recorded in the first nine months of fiscal 2025. This product mix evolution carries significant margin implications, as downstream processing typically commands premium pricing relative to commodity-grade aluminium.

The company's vertical integration strategy continues to advance, with operations at PT Bintan and PT Kan expected to materially enhance alumina self-sufficiency over the next two years. This development addresses a longstanding vulnerability in Press Metal's cost structure, reducing exposure to seaborne alumina markets that have experienced considerable volatility in recent quarters.

Market dynamics have turned increasingly supportive for aluminium producers. Maybank Investment Bank Research noted in September 2025 that global supply constraints, including China's production cap and disruptions affecting traditional supply sources, have created a tighter market environment. These structural factors underpin elevated commodity prices, which directly benefit low-cost producers like Press Metal operating with access to competitively priced hydroelectric power in Sarawak.

The company demonstrated operational resilience following the September 2024 fire at its Samalaju Phase 3 smelter, with full production resumption contributing to solid first-quarter 2025 earnings. RHB Investment Bank Bhd and HLIB both reaffirmed BUY ratings in May 2025, citing target prices of RM6.33 and RM6.21 respectively, figures the stock has since surpassed.

Press Metal's ascent to fresh highs reflects markets pricing in both near-term earnings momentum and longer-term strategic positioning. The combination of disciplined hedging, capacity expansion, and favorable industry fundamentals suggests the company remains well-positioned to capitalize on aluminium market dynamics, though execution on operational targets and continued commodity price support will prove critical to sustaining the current valuation premium.