Hot Stock Press Metal rises 2.1% on lucrative aluminium auto parts segment
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Hot Stock Press Metal rises 2.1% on lucrative aluminium auto parts segment
Hot Stock Press Metal rises 2.1% on lucrative aluminium auto parts segment |
Business & Markets 2014 |
Written by Jeffrey Tan of theedgemalaysia.com |
Monday, 18 August 2014 10:34 KUALA LUMPUR (Aug 18): Press Metal Bhd rose higher by as much as 2.1% after it set sights on the lucrative aluminium auto parts segment. The Edge Financial Daily today reported Press Metal intends to increase production of value-added aluminium products, such as alloy ingots, to 50% from the current 20%. The alloy ingots are mainly supplied to alloy wheel manufacturers. At 10.11 am today, Press Metal gained 12 sen or 2% to RM6.17. The top tenth gainer saw trades of 215,400 shares. It had earlier hit a high of RM6.18. In a note, AmResearch said it is ‘not surprised’ by the development noting Press Metal had been increasing its production of value-added products since the beginning of the year. Analyst Max Koh of AmResearch pointed out that Press Metal could fetch premium at around US$300 per metric tonne to US$450 per metric tonne on top of the London Metal Exchange spot aluminium price of US$1,993.85 per metric tonne currently. “Earnings will improve sequentially for the rest of the year on the back of rising aluminium prices,” he said. Despite the bright prospects in the aluminium industry, Koh maintained a ‘hold’ call for the stock at RM6.05 with an unchanged fair value of RM6.00, as he deemed Press Metal to be ‘fairly valued at this juncture’. He said this was due to Press Metal’s strong share price performance in the past few months. From a technical perspective, Kenanga Research said Press metal would see immediate support and resistance levels at RM6.05 and RM6.16 respectively. |
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