Shortage of aluminium has boosted its share price. Industry observers opine there could be leg for the share price rally given that the aluminium smelter is a prime beneficiary of rising metal prices due to low inventories coupled with high demand and cuts in global capacity.
PMetal’s smelters are currently (July 2014) operating at amaximum capacity and have competitive production costs compared to its peers.
Smelters are being shuttered worldwide due to rising costs. At the same time, demand is expecting to grow by 6% annually due to higher usage in automobile, aerospace and other industries.
There is a global aluminium deficit of 930000 tones for 2014.
The PMetal also enjoys the competitive electricity tariff offered by Sarawak Energy Bhd.
Market observers gave a far value of rm6.00. Its PER was also raised to 15 times from 12 times.
PMetal's closet peer is LB Aluminium ....
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