MSC (5916)
Market
price: RM4.16
NTA: 2.7098Malaysia Smelting Corporation (MSC) is world second largest tin metal products producer with yearly average produce 40,000t tonnes . Business is engaged in the custom tin smelting and tin mining operations in Malaysia and Indonesia.
Points to
highlight:
1.
Famous
institutional/ individual investor like I-Capital & Dr Neoh are largest 30
shareholders for this company.
2.
Strong
cash flow will coming in due to increase in tin metal price per tonne by
50& since January 2016 from USD15,000 per tonne to USD21,000 per tonne and
also huge foreign currency gain ready for grab. This will deliver super good
profit margin for company’s tin metal selling price.
3.
Improved
in fundamental of company by reducing debt from net borrowing position of
RM572million (20110) to 162 million (2016). And, Company’s more worry write off
issue will be settled soon due to amount left to write off is really not that
much anymore. So, its near future result should be very fascinating.
4.
Tin
ore reserve of Rahman Hydraulic Sdn Bhd (subsidiary of MSC) can last for at
least 15 years. Based on company’s report showed that company has around 33,000
tonnes and the production of tin-in concentrates one year is nearly 2,200
tonnes. So, (33,000 tonnes/2,200 tonnes= 15.00 years.)
In so many
good foctors as above, I believe MSC will doing good in 2017. If we assume MSC
able to deliver total net profit RM80 Million in 2017 and PE will be around 5
only at current Rm4.00 market price. Just imagine if PE 10 is standard thn MSC
should worth at least RM8.
