KUALA LUMPUR (May 20): Press Metal Bhd saw its share price fall 4% after a smelting plant belonging to one of its subsidiaries at Samalaju Industrial Park in Bintulu, Sarawak, caught fire.

At 10.32am, Press Metal (fundamental: 0.95; valuation: 2) fell 7 sen or 2.4% to RM2.80, with some 2.3 million shares exchanged. The counter earlier declined as much as 12 sen or 4.2% to reach a low of RM2.75.

In a filing with the exchange yesterday, the group said the fire broke out on Sunday (May 17) at the smelting plant belonging to its 80%-owned subsidiary, Press Metal Bintulu Sdn Bhd.

“At the time of this announcement, the board of directors is unable to ascertain the cause of the fire or estimate the full impact and consequences of the incident. The incident did not cause any harm to persons or any known uncontrolled emissions,” it said.

AmResearch Sdn Bhd noted that this is the second unscheduled shutdown for the group in two years, after its Mukah plant was shut down due to a state-wide power outage in June 2013.

“As a result, the group had to set aside RM40.5 million in provision for assets written off in FY13. Nevertheless, the plant was able to resume full capacity production by April 2014,” said the research house in a note today.

However, AmResearch believes Press Metal will be able to overcome the hurdle, given the group’s strong cash flow.

“Nevertheless, pending further clarity on the impact of the incident, we maintain our numbers for now,” it said.

The research house maintains “hold” on Press Metal, with a fair value of RM3.20.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)