KUALA LUMPUR: Press Metal Aluminium Holdings Bhd could capitalise on rising LME aluminium spot prices in 4Q given that its Samalaju Phase 3 facility is expected to be just weeks away from being fully operational.

       According to RHB Research, Samalaju Phase 3 could have been held back for one to two months from Press Metal's initial July target but sees little downside surprises moving forward.

       "This will allow 4Q21 to more freely capture the upside in LME aluminium spot prices vs a hedged sales proportion at 2021F’s USD2,050/tonne price.

       "This is in addition to the widening spread vs alumina spot prices – Phase 1 of PMAH’s 25%-owned Bintan alumina refinery should come on stream around the same time.

       "Hence, amid its slew of successive quarterly earnings growth, we foresee momentum picking up even stronger from 4Q21 onwards," it said in a note.

       Press Metal's 2Q21 core net profit of RM256mil was slightly below RHB's expectations but in line with that of consensus at 33.6% and 36.8% of full-year estimates respectively.

       Attributing the mild disappointment to the ad interim impact of MCO3.0 on production volumes, the research house added that the results underscored Press Metal's sustained earnings momentum headed into the second half of the year.

       It noted that Samalaju Phase 3 is progressively ramping up towards full production while LME aluminium prices remain at their strongest in a decade.

       "We make no changes to our existing forecasts, pending an update from tomorrow’s briefing.

       "Overall, while we see some volume downside on our 2021 estimates, 2022-2023 forecasts appear very much intact, given the subsequent full-year contributions of Samalaju Phase 3 and the aluminium market’s solid price trajectory," it said.

       RHB maintained its "buy" call and sum-of-parts-derived target price of RM8.