BUILDING MATERIAL 
[%fhqy%] [%zLXA%] 
Research by Kenanga
Overweight

“1QCY24 Report Card: Metal and Water Turn Auspicious”

We upgrade our sector call to OVERWEIGHT (from NEUTRAL), anchored by our recent upgrade of sector heavyweight PMETAL (OP; TP: RM6.35) to OUTPERFORM from MARKET PERFORM. There was a significant improvement in earnings delivery (against our expectations) by the sector in the recently concluded 1QCY24 reporting season with stocks under our coverage either beating or meeting our forecasts. We expect aluminium prices to stay firm on supply constraints while stable steel prices translate to stable steel product prices, reducing earnings volatility of steep product producers. Water pipe makers are poised for an exciting time ahead on the revival of water projects. Our sector top picks are PMETAL and ENGTEX (OP; TP: RM1.41)

Analyst(s):
Teh Kian Yeong 
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Nigel Ng 
[%gbJs%]

BUILDING MATERIAL 
$KLSE-PMETAL $KLSE-ENGTEX 
Research by Kenanga
Overweight

“1QCY24 Report Card: Metal and Water Turn Auspicious”

We upgrade our sector call to OVERWEIGHT (from NEUTRAL), anchored by our recent upgrade of sector heavyweight PMETAL (OP; TP: RM6.35) to OUTPERFORM from MARKET PERFORM. There was a significant improvement in earnings delivery (against our expectations) by the sector in the recently concluded 1QCY24 reporting season with stocks under our coverage either beating or meeting our forecasts. We expect aluminium prices to stay firm on supply constraints while stable steel prices translate to stable steel product prices, reducing earnings volatility of steep product producers. Water pipe makers are poised for an exciting time ahead on the revival of water projects. Our sector top picks are PMETAL and ENGTEX (OP; TP: RM1.41)

Analyst(s):
Teh Kian Yeong 
tehky@kenanga.com.my
Nigel Ng 
nigel@kenanga.com.my

$PMETAL / 8869 (PRESS METAL ALUMINIUM HOLDINGS BERHAD)