• With a track record spanning more than two decades, AMS is an established provider of semi-finished aluminium and copper products. The Group is currently executing a strategic shift toward value-added precision processing to serve the high-growth Semiconductor and Engineering Support Industries (ESI).

• We forecast a net profit CAGR of 28.0% between FY25 and FY28F, driven by a structural shift toward high-complexity processing works that are projected to expand core PATAMI margins to 8.3% by FY28F. 

• The Group is forecast to achieve a net cash position in FY26F, strengthening its balance sheet capacity to finance strategic initiatives. These include the establishment of a new Licensed Manufacturing Warehouse (LMW) in Penang and entry into the sustainable, high-margin aluminium scrap segment.

• We recommend SUBSCRIBE to AMS Advanced Material Berhad’s IPO with a target price of RM0.33 (13.8% upside) based on a P/E multiple of 14x pegged to FY27F core EPS of 2.3 sen.

Key Investment Highlights

Established Aluminium Midstream Specialist. AMS is an established trader and processor of semi-finished aluminium and copper products with over 20 years of operating history. The Group serves as a critical intermediary in the value chain, sourcing bulk materials from global suppliers (including the People’s Republic of China, United Kingdom, and Singapore) and providing value-added precision processing services. This "break-bulk" model, supported by 7 warehousing and processing facilities, allows the Group to achieve significant economies of scale and cost efficiencies, enabling it to meet diverse customer specifications. 

Strategic Pivot into Manufacturing and the Recycling Segment. AMS is pivoting toward sustainability-linked initiatives to drive long-term margin expansion. Key strategies include the establishment of a new Licensed Manufacturing Warehouse (LMW) plant in Penang and venturing into the collection and processing of aluminium scrap via AMS Ecogreen. This recycling initiative introduces a new growth avenue aligned with global sustainability trends, potentially enhancing the Group's margin profile through circular material utilisation. These moves transition AMS to an integrated player capable of capturing a larger share of the value chain.

Strategic Exposure to High-Growth Niche Segments. AMS has established a strong presence in high-value industries, particularly aerospace, semiconductors and ESI. The Group’s capability to supply high-grade aluminium with superior tensile strength and tighter specifications has enabled it to build a loyal 796 active customers base across Malaysia, Thailand, Singapore and Vietnam. In addition, its exposure to a broad range of end-user industries, including construction and automotive, provides diversification across multiple demand drivers. This balanced industry exposure acts as a natural hedge against cyclicality in any single sector, enhancing earnings resilience. In line with IMR’s projected 6.4% CAGR for Malaysia’s aluminium market over the 2025-2029 period, and supported by the Group’s execution track record, we forecast a core PATAMI 3-year CAGR of 28.0% over the FY25-FY28F period. 

IPO proceeds. To support growth, the Group intends to allocate c.45.8% of IPO proceeds towards strategic expansion, comprising RM8.1m (24.7%) for a new LMW plant and office in Penang to deepen its footprint in the semiconductor & ESI sector and RM6.9m (21.0%) for a venture into high-margin aluminium architectural products. The remaining proceeds will be deployed toward regional scaling via a new Kuantan distribution point (RM2.5m; 7.6%), repayment of borrowings (RM8.2m; 24.9%), and general working capital (RM2.7m; 8.1%), with RM4.4m (13.5%) set aside for listing-related expenses.

Valuation & Recommendation. We recommend SUBSCRIBE with a TP of RM0.33, premised on a target PE multiple of 14x applied to FY27F core EPS of 2.3 sen, which implies a 13.8% upside to the IPO price.

Key Investment Highlights

Established Aluminium Midstream Specialist. AMS is an established trader and processor of semi-finished aluminium and copper products with over 20 years of operating history. The Group serves as a critical intermediary in the value chain, sourcing bulk materials from global suppliers (including the People’s Republic of China, United Kingdom, and Singapore) and providing value-added precision processing services. This "break-bulk" model, supported by 7 warehousing and processing facilities, allows the Group to achieve significant economies of scale and cost efficiencies, enabling it to meet diverse customer specifications. 

Strategic Pivot into Manufacturing and the Recycling Segment. AMS is pivoting toward sustainability-linked initiatives to drive long-term margin expansion. Key strategies include the establishment of a new Licensed Manufacturing Warehouse (LMW) plant in Penang and venturing into the collection and processing of aluminium scrap via AMS Ecogreen. This recycling initiative introduces a new growth avenue aligned with global sustainability trends, potentially enhancing the Group's margin profile through circular material utilisation. These moves transition AMS to an integrated player capable of capturing a larger share of the value chain.

Strategic Exposure to High-Growth Niche Segments. AMS has established a strong presence in high-value industries, particularly aerospace, semiconductors and ESI. The Group’s capability to supply high-grade aluminium with superior tensile strength and tighter specifications has enabled it to build a loyal 796 active customers base across Malaysia, Thailand, Singapore and Vietnam. In addition, its exposure to a broad range of end-user industries, including construction and automotive, provides diversification across multiple demand drivers. This balanced industry exposure acts as a natural hedge against cyclicality in any single sector, enhancing earnings resilience. In line with IMR’s projected 6.4% CAGR for Malaysia’s aluminium market over the 2025-2029 period, and supported by the Group’s execution track record, we forecast a core PATAMI 3-year CAGR of 28.0% over the FY25-FY28F period. 

IPO proceeds. To support growth, the Group intends to allocate c.45.8% of IPO proceeds towards strategic expansion, comprising RM8.1m (24.7%) for a new LMW plant and office in Penang to deepen its footprint in the semiconductor & ESI sector and RM6.9m (21.0%) for a venture into high-margin aluminium architectural products. The remaining proceeds will be deployed toward regional scaling via a new Kuantan distribution point (RM2.5m; 7.6%), repayment of borrowings (RM8.2m; 24.9%), and general working capital (RM2.7m; 8.1%), with RM4.4m (13.5%) set aside for listing-related expenses.

Valuation & Recommendation. We recommend SUBSCRIBE with a TP of RM0.33, premised on a target PE multiple of 14x applied to FY27F core EPS of 2.3 sen, which implies a 13.8% upside to the IPO price.

AMS is principally involved in the trading of semi-finished aluminium and copper products and the processing of semi-finished aluminium products. The Group acts as a critical intermediary in the industry supply chain, sourcing bulk input materials such as aluminium plates, sheets, coils, rods, flat bars and extrusion profiles from global suppliers and distributing them to industrial customers across multiple sectors. In addition to trading activities, AMS also covers cutting and shearing of plates, sheets, coils, rods, flat bars services to customise ready-to-use metal components according to customers’ specifications and delivers to them accordingly.

Moreover, AMS serves a diversified range of high-growth and resilient industries, providing essential semi-finished metal products to the aerospace, automotive and transportation, construction and building materials, consumer and home furnishing products as well as semiconductor and ESI. By supplying specialised materials across supply chains, the Group has established a robust regional presence, serving a diversified customer base of 796 customers across Malaysia, Singapore, Thailand, and Vietnam as of the LPD (28 February 2026). This wide geographical footprint and industry exposure not only allow the Group to tap into major Southeast Asian industrial hubs but also serve as a natural hedge, reducing dependency on the cyclical nature of any single market or customer segment.

In the processing segment, which accounts for RM69.1m or 53.3% of total revenue in FY25, AMS strengthens its value proposition through extensive in-house capabilities that transform semi-finished aluminium into production-ready components by cutting the plates, rods, flat bars and coils and shearing the sheets. These value-added services enhance customer convenience by effectively reducing their capital expenditure and material wastage, fostering long term loyalty across its 796 strong client base. The Group utilises high precision machinery to perform vertical plate sawing, capable of handling thicknesses up to 600mm, alongside the shearing of sheets and customised cutting of rods and flat bars to meet exacting client specifications.

Despite maintaining high technical self-sufficiency, the Group strategically outsources niche processes (such as specialised coil slitting and shearing) to third-party providers. These services accounted for a negligible 0.30% of the processing segment's cost of sales in FY25. This hybrid operational model allows AMS to maintain a lean cost structure while ensuring the flexibility to scale its customisation capabilities in line with regional industrial demand.

AMS is principally involved in the trading of semi-finished aluminium and copper products and the processing of semi-finished aluminium products. The Group acts as a critical intermediary in the industry supply chain, sourcing bulk input materials such as aluminium plates, sheets, coils, rods, flat bars and extrusion profiles from global suppliers and distributing them to industrial customers across multiple sectors. In addition to trading activities, AMS also covers cutting and shearing of plates, sheets, coils, rods, flat bars services to customise ready-to-use metal components according to customers’ specifications and delivers to them accordingly.

Moreover, AMS serves a diversified range of high-growth and resilient industries, providing essential semi-finished metal products to the aerospace, automotive and transportation, construction and building materials, consumer and home furnishing products as well as semiconductor and ESI. By supplying specialised materials across supply chains, the Group has established a robust regional presence, serving a diversified customer base of 796 customers across Malaysia, Singapore, Thailand, and Vietnam as of the LPD (28 February 2026). This wide geographical footprint and industry exposure not only allow the Group to tap into major Southeast Asian industrial hubs but also serve as a natural hedge, reducing dependency on the cyclical nature of any single market or customer segment.

In the processing segment, which accounts for RM69.1m or 53.3% of total revenue in FY25, AMS strengthens its value proposition through extensive in-house capabilities that transform semi-finished aluminium into production-ready components by cutting the plates, rods, flat bars and coils and shearing the sheets. These value-added services enhance customer convenience by effectively reducing their capital expenditure and material wastage, fostering long term loyalty across its 796 strong client base. The Group utilises high precision machinery to perform vertical plate sawing, capable of handling thicknesses up to 600mm, alongside the shearing of sheets and customised cutting of rods and flat bars to meet exacting client specifications.

Despite maintaining high technical self-sufficiency, the Group strategically outsources niche processes (such as specialised coil slitting and shearing) to third-party providers. These services accounted for a negligible 0.30% of the processing segment's cost of sales in FY25. This hybrid operational model allows AMS to maintain a lean cost structure while ensuring the flexibility to scale its customisation capabilities in line with regional industrial demand.

AMS is principally involved in the trading of semi-finished aluminium and copper products and the processing of semi-finished aluminium products. The Group acts as a critical intermediary in the industry supply chain, sourcing bulk input materials such as aluminium plates, sheets, coils, rods, flat bars and extrusion profiles from global suppliers and distributing them to industrial customers across multiple sectors. In addition to trading activities, AMS also covers cutting and shearing of plates, sheets, coils, rods, flat bars services to customise ready-to-use metal components according to customers’ specifications and delivers to them accordingly.

Moreover, AMS serves a diversified range of high-growth and resilient industries, providing essential semi-finished metal products to the aerospace, automotive and transportation, construction and building materials, consumer and home furnishing products as well as semiconductor and ESI. By supplying specialised materials across supply chains, the Group has established a robust regional presence, serving a diversified customer base of 796 customers across Malaysia, Singapore, Thailand, and Vietnam as of the LPD (28 February 2026). This wide geographical footprint and industry exposure not only allow the Group to tap into major Southeast Asian industrial hubs but also serve as a natural hedge, reducing dependency on the cyclical nature of any single market or customer segment.

In the processing segment, which accounts for RM69.1m or 53.3% of total revenue in FY25, AMS strengthens its value proposition through extensive in-house capabilities that transform semi-finished aluminium into production-ready components by cutting the plates, rods, flat bars and coils and shearing the sheets. These value-added services enhance customer convenience by effectively reducing their capital expenditure and material wastage, fostering long term loyalty across its 796 strong client base. The Group utilises high precision machinery to perform vertical plate sawing, capable of handling thicknesses up to 600mm, alongside the shearing of sheets and customised cutting of rods and flat bars to meet exacting client specifications.

Despite maintaining high technical self-sufficiency, the Group strategically outsources niche processes (such as specialised coil slitting and shearing) to third-party providers. These services accounted for a negligible 0.30% of the processing segment's cost of sales in FY25. This hybrid operational model allows AMS to maintain a lean cost structure while ensuring the flexibility to scale its customisation capabilities in line with regional industrial demand.

AMS is principally involved in the trading of semi-finished aluminium and copper products and the processing of semi-finished aluminium products. The Group acts as a critical intermediary in the industry supply chain, sourcing bulk input materials such as aluminium plates, sheets, coils, rods, flat bars and extrusion profiles from global suppliers and distributing them to industrial customers across multiple sectors. In addition to trading activities, AMS also covers cutting and shearing of plates, sheets, coils, rods, flat bars services to customise ready-to-use metal components according to customers’ specifications and delivers to them accordingly.

Moreover, AMS serves a diversified range of high-growth and resilient industries, providing essential semi-finished metal products to the aerospace, automotive and transportation, construction and building materials, consumer and home furnishing products as well as semiconductor and ESI. By supplying specialised materials across supply chains, the Group has established a robust regional presence, serving a diversified customer base of 796 customers across Malaysia, Singapore, Thailand, and Vietnam as of the LPD (28 February 2026). This wide geographical footprint and industry exposure not only allow the Group to tap into major Southeast Asian industrial hubs but also serve as a natural hedge, reducing dependency on the cyclical nature of any single market or customer segment.

In the processing segment, which accounts for RM69.1m or 53.3% of total revenue in FY25, AMS strengthens its value proposition through extensive in-house capabilities that transform semi-finished aluminium into production-ready components by cutting the plates, rods, flat bars and coils and shearing the sheets. These value-added services enhance customer convenience by effectively reducing their capital expenditure and material wastage, fostering long term loyalty across its 796 strong client base. The Group utilises high precision machinery to perform vertical plate sawing, capable of handling thicknesses up to 600mm, alongside the shearing of sheets and customised cutting of rods and flat bars to meet exacting client specifications.

Despite maintaining high technical self-sufficiency, the Group strategically outsources niche processes (such as specialised coil slitting and shearing) to third-party providers. These services accounted for a negligible 0.30% of the processing segment's cost of sales in FY25. This hybrid operational model allows AMS to maintain a lean cost structure while ensuring the flexibility to scale its customisation capabilities in line with regional industrial demand.

Industry Overview

According to the Independent Market Research (IMR) report by Protégé Associates, the Malaysian aluminium industry, measured by the sales value of semi-finished aluminium products, recorded a market size of RM7.9bn in 2024. Despite volatility arising from global supply chain disruptions and fluctuations in LME prices, the market is projected to expand to RM10.7bn by 2029, implying a CAGR of 6.4% over 2025-2029. Growth is expected to be supported by rising demand and broad application of aluminium across key end-user industries including aerospace, semiconductor and ESI, construction and automotive, alongside ongoing infrastructure development and industrial expansion. As of FY25, AMS generated revenue of RM129.7m, representing c.1.6% share of the domestic aluminium industryThe aluminium value chain comprises upstream (bauxite mining, alumina refining and smelting), midstream (processing into semi-finished products), and downstream (fabrication into finished products) segments. AMS operates primarily within the midstream segment, focusing on the trading and processing of semi-finished aluminium and copper products, positioning the Group as an intermediary between global suppliers and domestic end-users. This segment remains highly fragmented, comprising a mix of manufacturers, traders and distributors, with competition largely centred on pricing, product range, and value-added services such as cutting, bending and processing.

A key emerging trend is the rapid expansion of the aluminium scrap recycling market, driven by global ESG initiatives and the lower energy intensity of secondary aluminium production. Malaysia has emerged as a notable regional hub for aluminium scrap, with imports valued at RM3.5bn in 2024, reflecting a CAGR of 15.3% since 2022. This shift towards a circular economy presents significant opportunities for industry players to integrate scrap collection and sorting into their operations. By venturing into scrap aluminium processing, AMS is well-positioned to meet the rising demand for low-carbon materials from multinational corporations and environmentally conscious end-users.

Demand for aluminium is closely linked to growth in key end-user industries. The aerospace and semiconductor sectors continue to expand, supported by rising global demand for aircraft, electronics, and data centre infrastructure. In the aerospace sector, which recorded a revenue of RM25.1bn in 2024, aluminium remains indispensable due to its high strength-to-weight ratio, particularly for aircraft structures and cabin interiors. Similarly, the semiconductor and ESI serve as a key growth catalyst, with Malaysia’s approved investments in semiconductors reaching RM48.1bn in 2024. As global manufacturers adopt the "China Plus One" strategy, Malaysia's established E&E ecosystem continues to drive demand for precision-cut aluminium plates and enclosures for advanced manufacturing equipment.

The construction sector is benefiting from infrastructure projects such as rail developments, ports, and industrial parks, which drive demand for aluminium in structural and architectural applications. Large-scale projects like the ECRL, RTS Link, LRT3, and Penang International Airport expansion are generating a multiplier effect on construction and industrial activities. The ECRL, expected to commence operations in January 2027, will specifically benefit industrial hubs in Kuantan, reinforcing AMS’s strategic decision to establish a new distribution point to capture the underserved East Coast market. Furthermore, the automotive sector, particularly electric vehicles (EVs), is a key growth driver as aluminium is increasingly used to improve energy efficiency and reduce vehicle weight. This trend is supported by national frameworks such as the New Industrial Masterplan 2030 (NIMP) and the National Energy Transition Roadmap (NETR).

While Malaysia relies heavily on imports for its copper requirements, the domestic market for semi-finished copper products remains robust, with imports reaching RM4.6bn in 2025. This demand is predominantly anchored by the E&E industry’s need for high-conductivity wiring, circuit boards and connectors, alongside the construction sector’s utilisation of copper in plumbing and HVAC systems. As Malaysia accelerates its transition toward green energy, including a targeted RM20.8bn in green mobility and renewable energy investments, copper’s role in wind turbines, solar panels, and EV motors and batteries is expected to support sustained growth for specialised traders and distributors like AMS.

Overall, the Malaysian aluminium industry presents a resilient growth profile, providing a favourable operating environment for midstream players such as AMS.

Financial Highlights

AMS has demonstrated robust top-line growth and margin expansion, with revenue increasing from RM61.3m in FY22 to RM129.7m in FY25, representing a 3-year CAGR of 28.4%. This significant growth was primarily driven by the Group’s entry into the high-value processing of semi-finished aluminium products segment in FY24, which contributed RM69.1m (53.3% of total revenue in FY25). The Group's Gross Profit (GP) margin has also shown a consistent uptrend, improving from 14.2% in FY22 to 15.6% in FY25. This margin resilience is attributed to the shift towards higher margin value-added precision processing industries, particularly within Semiconductor & ESI, which grew from RM7.9m in FY22 to RM47.9m in FY25. Net profit (PAT) increased from RM4.2m to RM8.9m over the same period, maintaining a healthy PAT margin of 6.8% in FY25.

Looking ahead, we forecast core earnings to grow by 25.9%/33.1%/25.2% to RM10.8m/RM14.4m/RM18.0m over FY26F-FY28F respectively. Earnings growth reflects the Group’s (i) strategic pivots toward the Semiconductor & ESI segment that carry superior margins and (ii) focus on doing high-complexity work which commands higher premiums, resulting in the shift away from the lower-margin industries and trading activities. This structural pivot, coupled with a projected revenue expansion to over RM200m by FY28F, reinforces the sustainability of the Group’s earnings and supports an expansion in overall core PATAMI margins from 7.2% in FY26F to 8.3% by FY28F. 

Post-listing, AMS is forecasted to maintain a highly resilient financial profile, transitioning into a net cash position in FY26F. This conservative capital structure provides the Group with substantial balance sheet capacity to fund the machinery and capacity expansion in the future. The Group does not have a fixed dividend policy. Given its expansionary focus, we do not factor in any dividend payout in our forecasts.

Sensitivity Analysis

Given that AMS’s profitability is highly sensitive to the execution of its high-value processing shift toward the Semiconductor and ESI segment, alongside the management of direct material costs, we have performed a sensitivity analysis to assess the resilience of our FY27F base case earnings. Our core projection of RM14.4m in Core PATAMI for FY27F is predicated on two primary assumptions: a Gross Margin of 23.5% in the Semiconductor and ESI segment and the segmental growth rate of 34.8%.

The analysis reveals that the Group’s bottom line is highly sensitive to cost fluctuations. Holding the Semiconductor and ESI segment growth constant at our base case of 34.8%, every 100-basis point shift in the Gross Margin results in an approximately ±4.6% swing in FY27F core earnings. This sensitivity underscores the critical importance of AMS’s ability to maintain its competitive edge in value-added precision processing industries, manage potential volatility in raw material prices and its ability to pass on potential increases in material and transportation costs.

Furthermore, the pace of the Group’s strategic expansion remains a key determinant of financial performance. Maintaining a gross margin of 23.5% in the Semiconductor and ESI segment, every 250-basis point variance in the Semiconductor and ESI growth rate shifts net earnings by approximately ±2.0%. These results highlight the inherent operating leverage within AMS’s business model. While the Group scales its revenue toward the RM200m mark, its ultimate profitability is notably responsive to the successful capture of market share within the Semiconductor and ESI segment.

Peers Comparison

AMS does not have any directly comparable listed peers on Bursa Malaysia specifically engaged in the value-added precision processing of semi-finished aluminium products. The companies selected for comparison represent the midstream aluminium industry in Malaysia, but their scope and specialisation differ from AMS’s core product offerings to high-value industries.

Valuation & Recommendation

We recommend Subscribe on AMS Advanced Material Berhad’s IPO, with a target price of RM0.33, representing a potential upside of 13.8% from the IPO price of RM0.29. Our valuation is based on a target P/E multiple of 14x applied to our FY27F core EPS of 2.3 sen.

The assigned target multiple of 14x is derived from a 5% premium to the simple average forward P/E of 13.3x from selected listed peers. We view it as a grounded benchmark that reflects a fair valuation for the Group’s higher-margin profile compared to other aluminium players. We believe the Group remains attractive given its healthy balance sheet transitioning into a Net Cash position in FY26F, and its above-average industry margins with a projected core PATAMI margin reaching 8.0% in FY27F. Furthermore, the Group’s strong exposure to the high-growth Semiconductor & ESI segment provides superior earnings visibility and growth prospects.

Investment Risks

High Customer Concentration and Margin Sensitivity. The Group exhibits significant revenue dependence on a single major customer (Customer A), contributing up to 21.0% of total revenue in FY25. This concentration risk is amplified by the customer’s exposure to the higher-margin aerospace segment, which requires specialised, high-tensile aluminium grades. In the absence of long-term contractual arrangements, any adverse change in this relationship, including order reductions, repricing or shifts in procurement strategy, could result in a dual impact on both revenue stability and gross margin profile. As such, earnings quality remains sensitive to the continuity of orders from this key customer.

Aluminium Price Volatility and Cost Pass-through Risk. Aluminium products account for a dominant share of the Group’s cost base, ranging from 82.1% to 95.3% of total purchases over FY22 – FY25, thereby exposing the Group to fluctuations in global aluminium prices. This also increases exposure to procurement and cost control risks, particularly if suppliers adjust prices upward in response to market conditions. Although the Group sources its aluminium products primarily from China and Malaysia, purchases are denominated in multiple currencies, comprising approximately 44.6% in USD, 30.9% in RMB and 24.5% in MYR in FY25. As such, the Group’s cost baseis influenced not only by macroeconomic conditions and supply-demand dynamics as well as foreign exchange movements. While the Group adopts a cost-plus pricing mechanism to pass on increases in raw material costs, margin compression may arise due to timing mismatches between inventory procurement and sales realisation, particularly during periods of heightened price volatility. Consequently, any inability to fully or promptly pass through cost increases may adversely impact gross margins, increase working capital requirements, and reduce earnings consistency.

Absence of Long-term Contracts and Earnings Visibility.  The Group secures most of its sales through purchase orders basis, limiting forward earnings visibility. The Group’s financial performance depends on its ability to continuously secure new orders and maintain its positioning within industry supply chains. Fluctuations in order size, specifications, delivery lead times and customer spending may result in revenue and earnings volatility across reporting periods.