---
endpoint: analytics
pattern: Materials
status: done
latency_ms: 175976
conversation_id: bc124dd4-7145-4008-965f-d1b0d144dd97
citations: 0
created: 2026-05-31 19:44:57Z
---

# Is CLSA incrementally more positive/negative on Press Metal. If so, why?

**Yes — CLSA is incrementally MORE POSITIVE on Press Metal (PMAH MK).** The rating itself has been held at **OUTPERFORM**, but every other axis of the call has moved up in the latest dedicated note (22-May-2025 "Moving ahead on expansion") versus the prior dedicated note (01-Dec-2024 "Outlook remains bright"). Analyst Zhen Ye Khoo authors both.

## What changed (May-2025 vs Dec-2024)

| Axis | Dec 2024 ("Outlook remains bright") | May 2025 ("Moving ahead on expansion") | Direction |
|---|---|---|---|
| **Rating** | OUTPERFORM [7] | OUTPERFORM [1] | Unchanged |
| **Target Price** | RM6.30 (26x 25CL PE) [8][7] | **RM7.30** (26x **FY26CL** PE, multiple unchanged) [1][4] | **+16% (up)** |
| **Upside potential** | +35% from RM4.68 [8] | **+45%** from RM5.03 [4] | **Up** |
| **Valuation base year** | FY25CL [7] | Rolled to **FY26CL** [4] | **Up (forward roll)** |
| **FY25CL EPS** | 24.8 sen [10] | 25.8 sen (**+4%** revision) [4][5] | **Up** |
| **FY26CL EPS** | 26.0 sen [10] | 27.9 sen (**+7%** revision) [4][5] | **Up** |
| **FY27CL EPS** | n/a | 29.8 sen (newly introduced) [4][5] | New |
| **FY25CL net profit (RMm)** | 2,005 [10] | 2,083 [5] | **Up** |
| **FY26CL net profit (RMm)** | 2,097 [10] | 2,249 [5] | **Up** |
| **Market cap** | US$8.7bn [8] | US$9.7bn [4] | Up (share price followed) |

## Why CLSA is incrementally more positive

**1. The PT Bintan / Nanshan alumina expansion is now in the numbers — a key new driver.**
The biggest incremental change is the explicit modeling of capacity additions at the 21.75%-owned (down from 25%) Nanshan Aluminium joint venture (PT Bintan). Management now guides alumina capacity to expand from **2m tonnes → 3m tonnes by end-3Q25**, then to **4m tonnes by end-3Q26**, with contribution ramping meaningfully from 4Q25 [3][1]. Khoo writes this drives "a new high in associate contributions in FY26/FY27CL despite the drop in alumina prices" [1] — i.e., volume more than offsets price, lifting the structural earnings base. The Dec-24 note had only flagged anticipated alumina supply increases as a cost-relief story for Press Metal's own smelting margins [9], not as an associate-contribution upside lever.

**2. The downside risk that gated the Dec-24 call has now reversed.**
In Dec-24, the worry was that **alumina prices had spiked to ~US$800/mt from US$504/mt in 3Q24**, threatening smelting margins; the bull case relied on supply additions easing this in 2Q25 [9]. By May-25 this has played out — **alumina prices dropped 25% QoQ to US$518/mt in 1Q25**, while **aluminium prices held firm at US$2,600/mt (+19% YoY, +2% QoQ)** — and profit from operations jumped 28% QoQ on the favorable input-cost swing [3]. Management now guides alumina steady around US$400/mt [3], so the structural margin tailwind that was a hope in Dec-24 is now a base case.

**3. 1Q25 print confirmed the thesis, especially on the associate line.**
1Q25 net profit RM462m **(+13% YoY)** was 23% of full-year forecast — squarely in line [1][2]. The standout was **associate profit at RM170m, +95% YoY** [2], validating the PT Bintan re-rating leg of the story even before the capacity-addition kicks in. The P3 smelting plant was also fully restored in March 2025, removing the operational drag that had constrained 1Q25 smelting volumes [2].

**4. Aluminium price floor still intact despite a softer macro.**
CLSA acknowledges aluminium prices have softened from earlier-2025 highs on inventories and US-tariff macro uncertainty, but argues prices remain "well supported at current levels (US$2.5k/mt) on China's production cap (supply tightness)" — the same structural argument that anchored the Dec-24 note (China's 45m-t cap, removal of the 13% export tax rebate from 1-Dec-2024 [11]). The bullish supply-discipline thesis is reaffirmed, just with the catalyst clock advanced.

## Caveat — what is NOT incrementally more positive

- **Dividend yield trajectory has been quietly trimmed**: FY25/26 dividend yield is now modeled at 1.7%/1.8% [5] versus 2.0%/2.3% in the Dec-24 file [10]. This reflects the higher share price denominator more than a payout cut, but it does mean the income story has weakened on a relative basis.
- **Revenue forecasts were cut**: FY25/26 revenue revised **−4.7% / −5.6%** [5] — the EPS upgrade comes entirely from margin/associate mix, not topline.
- **Stock performance had been weak going in**: 12M absolute return was −6.0% as of 22-May-25 [4]; the call is for the next leg, not a confirmation of what's been working.

## Bottom line

The directional move is clear: **TP +16% (RM6.30 → RM7.30), FY25/26 EPS +4%/+7%, FY27CL forecasts introduced, valuation base rolled forward one year, OUTPERFORM reiterated** [1][4][5]. The bull case has shifted from "wait for alumina cost relief" (Dec-24) to "alumina cost relief is here AND the associate platform is doubling by 2026" (May-25) — a more concrete, more dated, and higher-magnitude upside story driven by the PT Bintan / Nanshan capacity build-out [3][1].

---
**Sources**
[1] Press Metal - O-PF (Moving ahead on expansion) — CLSA (22 May 2025) — 607960312LinqAlpha.PDF
[2] Press Metal - O-PF (Moving ahead on expansion) — CLSA (22 May 2025) — 607960312LinqAlpha.PDF
[3] Press Metal - O-PF (Moving ahead on expansion) — CLSA (22 May 2025) — 607960312LinqAlpha.PDF
[4] Press Metal - O-PF (Moving ahead on expansion) — CLSA (22 May 2025) — 607960312LinqAlpha.PDF
[5] Press Metal - O-PF (Moving ahead on expansion) — CLSA (22 May 2025) — 607960312LinqAlpha.PDF
[6] Press Metal - O-PF (Outlook remains bright) — CLSA (01 Dec 2024) — 607945803LinqAlpha.PDF
[7] Press Metal - O-PF (Outlook remains bright) — CLSA (01 Dec 2024) — 607945803LinqAlpha.PDF
[8] Press Metal - O-PF (Outlook remains bright) — CLSA (01 Dec 2024) — 607945803LinqAlpha.PDF
[9] Press Metal - O-PF (Outlook remains bright) — CLSA (01 Dec 2024) — 607945803LinqAlpha.PDF
[10] Press Metal - O-PF (Outlook remains bright) — CLSA (01 Dec 2024) — 607945803LinqAlpha.PDF
[11] Press Metal - O-PF (Outlook remains bright) — CLSA (01 Dec 2024) — 607945803LinqAlpha.PDF
[12] Press Metal - O-PF (Outlook remains bright) — CLSA (01 Dec 2024) — 607945803LinqAlpha.PDF

