Winstar shines with aluminium

DEMAND for aluminium products is growing, so extrusion group Winstar Capital Bhd is pushing ahead with its business expansion plans.

The company is doubling its current capacity for producing aluminum products for different industries including construction by adding four more machines at its plant in Ijok, Kuala Selangor, chief executive officer Vincent Chua Boon Hong says.

“We are now running at almost full capacity, demand is growing because aluminium is a substitute for a range of products, including wood,” Chua tells StarBiz 7.

He says the ongoing war in the Middle East has caused material costs to go up by as much as 20%.

However, this has so far been passed on to customers.

“We have passed on the increase in material costs, however other costs including labour, we have so far absorbed, because a lot of our customers are recurring customers. Right now, it (costs increase) is still manageable, “ he says.

Currently, Winstar has over 5,000 customers and every new purchase order can range from anywhere between RM1,000 and RM200,000, according to Chua.

It currently has about RM10.5mil in purchase orders.

“One of our main challenges is cash flow, especially in a time when we are doubling our aluminium extrusion capacity, from the current 6,000 tonnes per annum. We need the cash...,”

He says net margin for the company continues to be around 5%, which is the industry average.

“Margins typically depend on the industry we are supplying to.

“For those which require specific and customised products, the margins are higher and we plan to do more of this high-margin business,” Chua adds.

Winstar’s largest shareholder Sunview Group Bhd recently said that it was seeking a shareholders’ mandate to fully dispose of its stake in the company.

Sunview expects to sell its 22.44% equity interest held via Vafe System Sdn Bhd at no less than 43 sen a share to third party purchasers to be identified later.

Chief operating officer Lee Yong Zhi says the proposed disposal of the stake in Winstar by Sunview will not affect the daily operations of the company as Winstar “is serving a wide portfolio of close to 5,000 clients.”

However, he admits that the progressive disposal of Winstar shares may create some instability in the company’s share price as the quantity of freely tradeable shares is expected to increase in the open market, once the sale is done.

On the other hand, this could likely increase the liquidity of Winstar’s stock, he adds.

Chua says every year, the company’s management targets to achieve a revenue growth of 20% to 30% based on the previous financial year’s performance.

The company made a net profit of RM10.3mil for its financial year ended Dec 31, 2025 on revenue of RM235.4mil compared to a net profit of RM7.4mil on sales of RM203.4mil, a year earlier.

In a coverage initiation research report, Berjaya Research notes that with over two decades of operating in the midstream and downstream segments of the aluminium industry value chain, Winstar commands an estimated 3.5% share of Malaysia’s aluminium extrusion market, based on its 2024 aluminium extrusion segment revenue of RM120.8mil.

Expansionary phase

Its strong operating track record, technical capabilities and diversified customer base underpins its competitive positioning, enabling the group to serve a wide range of customers across construction, industrial, and renewable energy sectors, it says in the report issued in March.

“Winstar is entering an expansionary phase with the development of a new manufacturing plant that will more-than-double its existing production capacity upon its targeted completion in 2027.

“With current operations already running close to full utilisation, the additional capacity will be timely in supporting the group’s growth ambitions.”

Berjaya Research reckons that the new facility is expected to enhance Winstar’s ability to capitalise on the ongoing construction sector growth and rising demand for aluminium extrusion products.

It will also improve operational flexibility and support future product diversification.

The research house also notes that the group aims to broaden product offerings to include solar photovoltaics (PV)–related aluminium components such as brackets, clamps and ancillary accessories.

This move is viewed as timely as it capitalises on multiple government-led initiatives under the National Energy Transition Roadmap which are expected to accelerate solar adoption nationwide.

Winstar started the fabrication of aluminium solar PV mounting structures for the installation of solar PV systems two years ago.

Berjaya Research has initiated coverage on Winstar with a “buy” recommendation and a target price of 71 sen, derived from ascribing a target price earnings ratio (PER) of 18 times to its 2026 earnings per share of 3.9 sen.

The assigned target PER represents a discount to the one-year historical mean average of 19.4 times, to account for its relatively smaller market capitalisation and the execution risks associated with its ongoing capacity expansion plans,

Nevertheless, Berjaya Research states it likes Winstar for its commendable 3.5% market share of the Malaysia aluminium extrusion market as of 2024, expansionary plan entailing new manufacturing capacity, its leverage on rising infrastructure investments, and its pivot towards the renewable energy sector.

Key downside risks include slower-than-expected plant expansion plan, high dependency on manual labour, and fluctuation in aluminium billets price, the research company adds.

At last look, the Winstar stock was at 55 sen apiece.