PMB Technology Bhd, an associate company of Press Metal Aluminium Holdings Bhd, emerged as winner for the highest returns to shareholders in the industrial products and services sector in The Edge Malaysia Centurion Club Corporate Awards 2019.
Despite being much smaller in terms of market capitalisation — RM658.74 million compared with parent Press Metal Bhd’s RM19.26 billion — PMB Tech is successful in its own right.
During the evaluation period of March 31, 2016, to March 31, 2019, alone, its adjusted share price skyrocketed 654% to RM3.35, which translates into aa adjusted three-year compound annual growth rate of 48.1% — the highest total shareholders return among The Edge Malaysia Centurion Club member companies in the industrial products and services sector.
The company also declared a four sen dividend per share for FY2016 and FY2017, before lowering it to two sen in FY2018.
While PMB Tech has consistently generated an annual net profit of RM9 million to RM10 million from its financial year ended Dec 31, 2016 (FY2016) to FY2018, it should be noted that the counter is currently trading at a high price-earnings ratio of 68 times.
The company is mainly involved in the design, fabrication and installation of aluminium curtain walls, cladding, skylights and façade works, as well as the fabrication and installation of aluminium system form works.
In other words, PMB Tech is focusing on downstream aluminium products, complementing the upstream business activities of its parent company.
The company is also the largest aluminium scaffold system manufacturer and the sole distributor of Haulotte aerial access equipment in Malaysia.
Interestingly, PMB Tech also distributes the extruded aluminium profiles from its corporate shareholder Press Metal, as well as other related building materials, making it a one-stop centre for the supply of interior construction materials.
More importantly, the company has a reliable supply from Press Metal. This position is further strengthened by its ownership of several prestigious distribution agencies.
Press Metal is a multi-billion-ringgit smelting giant that was founded by the Koon brothers in 1986, and is the largest aluminium smelter in Asean.
It currently has an annual smelting capacity of 760,000 tonnes per year and an annual extrusion capacity of 210,000 tonnes.
It is worth noting that Press Metal, the single largest shareholder with a 27.43% stake in PMB Tech, was named Company of the Year in The Edge Billion Ringgit Club awards in 2010, scoring high on earnings growth and returns to shareholders over the previous three years.
PMB Tech — winner of the highest returns to shareholders in the industrial products and services sector in The Edge Malaysia Centurion Club Corporate Awards 2019 — is investing about RM300 million in a second-phase manufacturing facility at Samalaju Industrial Park in Bintulu, Sarawak, to double its production capacity of metallic silicon to 72,000 tonnes per year.
Construction of the facility commenced in April, after PMB Tech signed a 25-year amended and restated power purchase agreement with Syarikat SESCO Bhd, a unit of Sarawak Energy Bhd, for a total of 104mw of electricity.
The first phase of nominal electrical load of 54mw is expected to be fully drawn by year end while the second phase of 50mw is expected to be fully drawn by the end of next year. The second phase is expected to be completed and commissioned in the fourth quarter of this year.
Upon completion of the second phase, PMB Tech group’s total combined built-up area dedicated to its metallic silicon business will be raised to 1.245 million sq ft from 630,000 sq ft.
The first phase of the facility, which has an annual production capacity of 36,000 tonnes, cost RM211 million, including equipment and machinery. It commenced commercial operations in March this year.
According to PMB Tech senior independent non-executive director Loo Lean Hock, the production expansion is to meet demand from the group’s existing and potential customers and will enable the company to achieve economies of scale.
See the other winners in The Edge Malaysia Centurion Club Corporate Awards 2019 here.