♨️ Fresh Ingot from Smelters ♨️

sharing from remiser $PMETAL / 8869 (PRESS METAL ALUMINIUM HOLDINGS BERHAD)

*PMETAL (Maintain BUY, TP at RM6.30 based on 28.0x 2025 PE)*

_Press Metal's share price has dropped by approximately 5% today following news_
https://cutt.ly/4eEB3rw3

*A factory fire occurred at the Samalaju Industrial Park in Bintulu, starting late last night.* The Malaysian Fire and Rescue Department (JBPM) Sarawak received an emergency call at around 11:50 PM and dispatched teams from Samalaju and Bintulu Fire and Rescue Stations.

*The fire destroyed around 10% of the factory structure.* Preliminary investigations suggest the fire was caused by *a leak during the aluminum smelting process. All workers were safely evacuated by the Emergency Action Team (ERT). Firefighters took seven hours to extinguish the fire, which ended at 6:20 AM after ensuring the area was safe and the smelting area had cooled down.

*Quick comment:*

After a quick chat with management, we confirmed that this is real. *The fire incident was main due to pot leakage due to heavy rain season.*

This fire incident has affected about *9% of their production, and it will take approximately 3-4 months to restore operations.* As a result, it is expected to impact about *3-4% of the 2024 annual output.* Management is confident that this issue *will be resolved within 2024* and will not carry over into 2025.

*Financial impact.* Management mentioned that this will *reduce the 2024 profit before tax (PBT) by about 3%. However, most of the loss will be covered by insurance.* That said, the *3% PBT loss does not yet include compensation from insurance.* Further details are pending management guidance.

At this juncture, we still *Maintain BUY with an unchanged target price of RM6.30, still based on 28.0x 2025F PE (which is at -0.5SD below its five-year forward PE mean)*, as we believe this is a temporary impact that will not extend into 2025.