Achieving net-zero greenhouse gas (GHG) emissions means balancing the amount of greenhouse gases produced with an equivalent amount removed from the atmosphere, typically through mitigation measures and carbon offsetting. According to Ministry of Economy, the National Energy Transition Roadmap outlines Malaysia's commitment to a low-carbon pathway in the energy sector, aiming to reduce GHG emissions by 32%, from 259 MtCO2eq in 2019 to 175 MtCO2eq by 2050. The key catalyst projects and initiatives aimed at achieving the target include the implementation of efficient switches, the establishment of renewable energy zones, the development of energy storage solutions, ensuring energy security, and promoting the production of green hydrogen.
Metal companies such as those in aluminium, steel, and ferroalloys are key players in industries known for substantial carbon emissions. The production processes, particularly in aluminium and steel involve energy-intensive methods, contributing significantly to greenhouse gas emissions. Therefore, this report will focus on the 'Environmental' aspect in the context of the sustainability of metal companies, with a specific emphasis on their efforts to reduce carbon emissions. By examining the strategies, initiatives, and practices adopted by these companies in addressing environmental concerns, we aim to provide insights into their commitment to mitigating climate change and fostering a more sustainable future within the metal industry.
We have a NEUTRAL stance on industrial sector given persistence short-term downside risks despite promising long-term prospects for metal companies, particularly Press Metal and OMH. We have BUY call for Press Metal (RM5.43), OMH (RM2.11), Scientex, (RM4.15) and Wellcall (RM1.73), HOLD call for Hextar Global (RM0.69) and KPS (RM0.77) while SELL call for PMB Technology (RM1.11) and Ann Joo Resources (RM0.84).
Source: BIMB Securities Research - 14 Nov 2023
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