17 AUGUST 2017 11:01AM Press Metal - Pressing Earnings Higher RECOMMENDED: BUY TARGET PRICE: MYR 3.88 PRICE: MYR 3.29 As we expect profitability to improve in the coming quarters, we deem the results to be in line with our and consensus projections. We continue to like the company and maintain our BUY recommendation. However our DCF-derived TP is revised up to MYR3.88 (from MYR3.66, 18% upside) after factoring in still-conservative 0% terminal growth (from -2%). As Press Metal is the largest client for Sarawak Energy, we think it remains in a strong position to renegotiate a favourable tariff after the expiry of the current 20-year PPA.
1H17 earnings within expectations. Press Metal’s 1H17 core net profit of MYR298.2m was within our and market expectations. Revenue was up 42.6% YoY mainly attributable to additional production output generated at its Samalaju phase 2 smelting plant (additional 320,000MT of ingots) and higher metal price of USD1,878.8/MT (vs USD1,543/MT in 1HFY16).
PBT growth of 21.5% YoY was lower compared to revenue growth, mainly due to additional insurance claim in 1H16 of MYR76m. Excluding the insurance claim, core net profit grew 81.1% YoY on the back of higher revenue.
Another record year in 2017. We see room for earnings upside although all pots are operating at full capacity. Key drivers include:
Potential cost savings derived from the new smelter commissioned last year, as it shares common infrastructure, with room to lower power usage;
Commissioning of Samalaju Port (capable of handling Panamax vessels) scheduled for July, would help to cut inland logistics and shipping costs;
Increased value-added production may help to enhance profitability;
Upward bias for the all-in aluminium price, which we believe has bottomed out, with the spot contract at the London Metal Exchange hovering at above USD2,000/MT mark (we have assumed USD1,700/MT for 2018F);
Prolonged weakness in the MYR benefits the company, as a third of its production cost is denominated in MYR while revenues are in USD terms.
Forecast and risks. As we expect its profitability to improve in the coming quarters, we deem the results to be in line (1H17 was 48% of 2017 estimates) with our and consensus projections. We make no changes to our estimates. Key risks include lower aluminium prices that could hurt profitability and investor sentiment towards the counter, while unexpected power supply interruptions at its smelting plant may damage machinery and disrupt operations.
Reiterate BUY, higher TP. We continue to like the company and maintain our BUY recommendation. However our DCF-derived TP is revised up to MYR3.88 after factoring in 0% terminal growth (from -2%). Since Press Metal is the largest client for Sarawak Energy, we think it remains in a strong position to renegotiate a favourable tariff after the expiry of the current 20-year power purchase agreement (PPA).
KUALA LUMPUR: Press Metal Aluminium Holdings Bhd, the largest integrated aluminium producer in Southeast Asia, posted a net profit of RM150.17 million for the second financial quarter ended June 30, 2017 (2QFY17), up 2.8% from RM146.07 million in 2QFY16, driven by a higher revenue.
Quarterly revenue surged 31% to RM2.08 billion from RM1.59 billion a year ago.
The jump in revenue was mainly due to the additional production output generated by its Samalaju phase 2 smelting plant and higher metal prices in 2QFY17 compared with 2QFY16, the group said in a bourse filing yesterday.
Press Metal declared an interim dividend of 1.5 sen per share, to be paid on Sept 20. The ex-date for the dividend is Aug 30.
For the first half of FY17 (1HFY17), Press Metal achieved a record-high net profit of RM298.22 million, an increase of nearly 24% from RM240.63 million a year ago.
Revenue for 1HFY17 surged 42.6% to RM4.1 billion, from RM2.88 billion in 1HFY16.
Press Metal group chief executive officer Datuk Paul Koon said the group will continue its efforts to enhance its plant efficiency and expand its value-added product lines to further widen margins.
“We are very pleased with our record profit in the first half of 2017, which is our first year running on designed smelting capacity of 760,000 tonnes per annum,” he said in a statement yesterday.
Semua analyst cakap pun lebih kurang sahaja hanya bezanya harga sasaran itu saja . Percayalah Pmetal sebab ia memang boleh . Petang nanti Pmetal ini betul-betul ' Marah ' .Terima kasih Pmetal .
Sad to see meistsk have to resort to namecalling when he dun even know what he invested in hahahahaha.call all u want.just bought after selling 3.35 and bought back 3.31.im earning all the way lolx.
*Only losers call name cos they know they cant win haahahah.poor meistsk.mama din teach u proper manner
Pmetal nanti tunjuk kekuatan dan kehebatan yang dimiliki oleh kamu . Buktikan kepada mereka Pmetal boleh dan tetap boleh . Terima kasih banyak-banyak .
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Awet91
1,934 posts
Posted by Awet91 > 2017-08-17 10:45 | Report Abuse
Sikit2 lama2 jd bukit.tggu peluang lagi