Better times seen for MSC this year

Lets remind ourselves again

THE sharp recovery in the global tin prices is a boon for tin miner and metal producer, Malaysia Smelting Corp Bhd (MSC).

Its share price in recent months has been on an uptrend touching a high of RM3.26 on Sept 8 from a low of RM2.21 on Feb 3 before settling two sen higher at RM3.20 on Thursday.

Year-to-date, the price of tin has risen by over 30%. The metal is currently trading at US$19,200-US$19,270 per tonne range on the London Metal Exchange (LME) and Kuala Lumpur Tin Market (KLTM).

According to industry observers, the fortunes of MSC are set to take a turn for the better this year after experiencing a 6-1/2 year slump in global tin prices.

 

Since early this year, tin has climbed steadily following declining supplies from the world’s top producing countries China and Indonesia.

The LME tin stocks in its warehouses are also depleting, down by 20% to about 4,460 tonnes in September from a month earlier.

MSC is the world’s second largest tin mining and smelting group with an annual refined tin production of over 30,000 tonnes.

It has an international smelting operation in Butterworth and tin mining operation is managed by its subsidiary Rahman Hydraulic Tin Sdn Bhd (RHT).

With tin prices improving, MSC chief executive officer, Chua Cheong Yong (pic) is optimistic that MSC international smelting plant and RHT mines are expected to perform satisfactorily and will generate strong cash flows for the current financial year ending Dec 31.

“While the overall refined tin production is not likely to change much, profit margin, especially on the mining side, will see some expansion in the environment of higher tin prices,” he adds.

Chua tells StarBizWeek: “We will continue to subscribe to the commodity price cycles model and, in our view, the main challenge for any resource based industry is to be able to build a business model and structure that will be resilient enough to ride through these cycles.”

“The current rally for tin is more supply driven rather than demand related. While tin demand is currently stable, the growth potential is expected to be realised only in the mid-term scenario as tin use in energy related industrial applications, particularly in the battery sector, gathers momentum.

Chua says MSC has been resilient to withstand the severe down cycle, particularly in 2015, which caused significant operating losses and large asset impairments by major global mining and commodity trading companies alike.

The management’s initiatives last year at implementing cost-cutting measures and being frugal in expenditure have strengthened the Group.

“Despite the difficult and challenging market environment in 2015 our core operations, were able to achieve commendable performances and the Group’s cash and liquidity positions have continued to remain strong.”

MSC’s financial position continues to be healthy as the operations generated strong cash flows of RM90.8mil in the first half of 2016.

In June this year, MSC has proposed to acquire Metal Reclamation Industries Sdn Bhd (MRI) through its wholly-owned subsidiary MSmelt Sdn Bhd for RM50mil in cash.

Chua says: “Therefore, the company’s current year focus will be to complete the acquisition by fourth quarter of this year.”

“As a result we will not, in the near term, be actively seeking for new tin investments opportunities.”

Chua explains further that one of the current company’s priorities is to complete the MRI acquisition and then to adapt and convert the MRI plant for tin smelting and integrate it into the group’s international tin smelting operations.

The MRI plant, which is located in Pulau Indah, possesses the new generation smelting technology which is a more comprehensive and efficient smelting process as compared to MSC Group’s smelting facility in Butterworth.

Besides more superior cost and operating parameters, the new technology is also better suited to address the increasingly stringent environmental requirements.

He also says: “We believe this technology will propel MSC Smelting Division into a more sustainable and competitive custom smelting force in the global tin industry.”

For Rahman Hydraulic Tin , the exploration programme to expand the mine’s resource base is ongoing, says Chua adding that: “We hope to be able to complete the programme in the near term. These priorities should keep us busy at least for the next couple of years.”

Having said that, Chua adds the group will still continue to invest in its future, even at times when (tin) prices are low.

Besides ongoing exploration programmes to expand the group’s tin resources, MSC has also participated in the private placement of Alphamin Resources Corp in 2015 to increase its equity interest in the company to 5%.

Alphamin is a Toronto Venture Exchange listed developer of the Bisie project, a very high grade tin prospect located in Democratic Republic of Congo.

“We believe the small entry investment will provide MSC Group with favourable and interesting growth opportunities when the cycle turns.”

“The movement in commodity prices, the stability of the local currency and any major policy adjustments in the advanced and emerging economies will continue to have impact on the group performances in today’s challenging macroeconomic environment,” adds Chua.

Tin Prices Seen Extending Climb as Global Shortages to Last

Bloomberg) -- Tin, which has surged more than 40 percent this year, is set to keep advancing amid continued shortages because supply is not coming on fast enough, according to Peter Kettle, chief analyst at research group ITRI Ltd.

Prices may rise to about $30,000 a metric ton in 2018-2019, Kettle said at an industry conference in Shanghai, an increase of 42 percent from the level now. The market will have a deficit of 10,000 tons to 15,000 tons this year and a similar shortfall in 2017, he said on Tuesday. Tin is among the top picks for researcher CRU Group next year, said Susan Gao, head of consulting in China.

Tin, used for soldering in electronics, has gained to the highest level in more than two years, and is the best performer after zinc on the London Metal Exchange in 2016. Top shipper Indonesia has curbed exports and inventories in sheds tracked by the LME have slumped to the lowest since 2004. Tin and zinc are “the standout stories in terms of structural supply constraints capable of tightening the market,” Standard Chartered Plc said last month.

“We’re in a very long-term trend of declining stockpiles,” Kettle said. “If stocks fall much further, we will get to a critical point that prices could go much higher than the medium-term equilibrium” of about $22,500 a ton, he said. ITRI is a U.K.-based company which supports the industry and helps to expand the metal’s use. The group is backed by producers and smelters.

Shipments by Indonesia, the world’s largest exporter, plunged to 52,617 tons in the first 10 months of this year, the lowest for the period in at least a decade, from 61,713 tons a year earlier, Trade Ministry data show. Global supply trailed demand by 20,500 tons in the first eight months of 2016, according to data from the World Bureau of Metal Statistics. LME-tracked stockpiles have fallen by more than half since May.

Refined output in the country may drop to about 60,000 tons this year, Jabin Sufianto, head of the Association of Indonesia Tin Exporters, said in September. That compares with 67,350 tons in 2015 and would be the lowest since 2002, according to WBMS data. Kettle said on Tuesday that Indonesian supply will be about 60,000 tons in the medium term.

While Indonesia’s production has been hurt by rains and mining regulations, it could be 60,000 tons to 70,000 tons this year and may rise slightly in 2017 if the weather improves, Riza Pahlevi Tabrani, president director of top producer PT Timah, said in an interview. Timah’s shares have more than doubled in 2016 and reached the highest in two years this month.

Prices above $22,500 are needed in the medium term to spur the supply required to balance moderate growth in demand, said Tom Mulqueen, an ITRI analyst. While Bolivian production is set to rise, output in China, Indonesia and Peru is faltering, he said. Tin for delivery in three months time added 1.2 percent to $21,100 on the LME by 10:48 a.m. in London on Tuesday.

Along with tin, Gao from CRU said at the conference that crude oil, nickel and zinc were also among her top choices for next year and that commodity prices overall were poised to rise further.

(Updates to add comment in penultimate paragraph.)

©2016 Bloomberg L.P.

November Tin price

NOVEMBER 2016 TIN PRICES 

DATE	USD	RM	EXCHANGE RATE	TURNOVER
1	20,650	86,519	4.1898	35
2	20,800	87,422	4.2030	29
3	20,750	87,005	4.1930	45
4	21,150	88,893	4.2030	28
7	21,530	90,727	4.2140	51
8	22,000	92,686	4.2130	41
9	21,700	91,324	4.2085	28
10	21,700	92,290	4.2530	35
11	21,600	92,416	4.2785	41
14	21,350	92,435	4.3295	64
15	21,000	91,182	4.3420	42
16	20,050	87,318	4.3550	55
17	20,050	87,959	4.3870	22
18	20,100	N.Y.A	N.Y.A	31

http://www.mtpma.org.my/index.php/statistic/2014-07-07-04-56-57

Global Tin Market

Tin solder is the largest end-use sector now accounting for 48% of global demand. The demand for tin solder is driven by substitution for lead solder and growth in demand for consumer electronics. Lower growth in consumer electronics and thrifting have reduced solder’s market share from 54% at the peak in 2010 to 48% in 2014.

Lead-acid batteries, the fastest growing end-use, represented 7% of the market in 2014. Chemical uses are also growing rapidly rising to 16% in 2014.
Tinplate for food cans was the second largest end-use in 2010. However, greater growth in other sectors have reduced its market share to 15% in 2014.
China is now the largest consumer of tin due to rapid growth in electronics manufacturing – it accounts for 35% of the global market.
Global tin demand is 365,000 tonnes or $9 billion dollars at a long-term price of US$25,000 per tonne.
Primary tin production at 290,000 tonnes has failed to meet demand for several years with growth in secondary supply to 75,000 tonnes required to bridge the gap.
China and Indonesia are the largest primary producers of tin accounting for 67% of global production. Both countries are likely to face declining supply due to falling grade and rising costs. Other established producers in South America and Africa face similar issues.

Declining stocks suggest that secondary may not grow fast enough to meet demand growth and cover the loss of primary supply.
New production from the Heemskirk Tin Project and other proposed tin developments is required to help bridge the supply-demand gap in the future.
Rising London Metal Exchange tin prices reflect the need for new sources of supply.

Is Ekovest investible? - felicity

from felicity.
http://www.intellecpoint.com/2016/11/is-ekovest-investible.html
After the article on Ekovest a month ago, its share price has since rose from circa RM1.95 to now around RM2.18.

(Before I deliberate on this topic, I would like to insist, I have always been very careful when putting my positive comments on a company as it has to be a long term value stock. My definition of a long term value stock is always about one potentially can be putting away his/her money for years as investments and the fundamental of the company has to be of creating value to its investors. Value investment is always a subject of debate as is it just an undervalued stock or is it also a very good company which will consistently provide better value than other companies among its peers. In my perspective, it is always more of the latter where it will continuously provide investment value, than the former i.e just cheap stocks but can also be poor in terms of business performance.)  

Ekovest to me is putting itself to be a company with recurring revenue from its assets although at this moment, it is still more of a construction company. I will put the composition of its construction:property:toll businesses at the moment to be as follows 60:15:25. (I know, I am aware of how I described Gadang)

In 3-4 years down the road though, Ekovest is going to be a very different company. That is very important to me as its composition will be more like 35:15:50 in the order of construction:property:toll. Why?

Its toll business itself may potentially be even bigger than LITRAK. As it is, for DUKE 1, after its 6th to 7th year of operations it has started to register good profits (cashflow wise, would be even better). By the time DUKE 2 and SPE becomes operational, it could be a very substantial toll operator than a construction outfit. (I would be even more amazed if its construction arm is to be just as big, which means that it will be getting more jobs)

Yesterday, in a Q&A session, the CEO of EPF put down that for his private equity investments, he is looking at IRR of between 10% to 13%. He further mentioned,

“If you look at the types of assets that we have been investing in, they would typically have an IRR range of between 10% and 13%, depending on the risk profile of the assets, the tenure of the concessions and the security of cashflows

“For instance, a power plant asset which has secured power purchase agreements would be in the lower range, while something that has a bit more revenue volatility would be in the higher range,”

I will take it that for DUKE as it has some volatility, EPF is probably looking at around 11%. In today's low interest rate environment, where US is offering almost zero, 11% is very high. I would not mind putting my money in stable investment which returns 11% IRR.

From that perspective, I will take the positives and negatives - if I am an investor of Ekovest, it is willing to let go 40% for 11% IRR, this is a negative. I am sure that it can get better deals elsewhere.

From a positive standpoint, Ekovest still has 60% of that asset which it stands to gain 11% IRR at valuetion of (RM2.825 billion) still for more than 40 years (in fact more, as a concession investment such as DUKE has a definite concession period, hence when doing a DCF it will take into account that definite period - not indefinite period in which case they use terminal value). So for any investors, even putting money for DUKE already has his money worth with very strong IRR. For me, if the IRR of 11% is right, Ekovest's 60% ownership could translate into at least a good multiple of what the EPF is paying for as concession assets has good value - just look at LITRAK which still enjoys 16x PE despite its concession to remain around 15 years?

And as mentioned in previous article, what about Ekovest's other assets such as SPE, its construction business and property projects? They must have worth some good numbers as well.

Is it investible though?

Now, after the above, is Ekovest an investible stock? There are several benchmarks to a company. Firstly, even if it is to make money, bring in good cashflow (remember, some red chips (China's) companies showed profits, cashflow but without or little dividends) - would the management be ready to share part of it in the form of dividends? Here are the track record of the company's dividend payment since 2000.

Dividend and net profit of Ekovest from FY2000 to 2016

I am quite comfortable as although for certain years, its dividends to net profits dropped (2012 - 2013) - that, I believe was mainly due to the company needed funds for the acquisition of DUKE assets. Ekovest does pay dividends every single year during the period in review.

The management has mentioned of its willingness to pay some of its return of RM1.13 billion to shareholders. That has yet to be announced. If I am to read its cashflow requirement, the amount should not be too low - i.e. less than RM100 million.

Another thing which was of concern to me was that the free float for Ekovest was way too low for some time - somewhere in the range of 5% to 10% as it is still a very tightly held stock - through Lim Kang Hoo's family, Haris Hussein (brother of Hishamuddin Hussein) and an old partner of Lim Kang Hoo, Khoo Nang Seng. In the last few months, the two groups except for Lim Kang Hoo has disposed off some of their shares. One may think that they are selling early which is a bad sign, but that has also translated into more liquidity for the market. (Frankly, I do not know how to read this.)

Ekovest has not been a much followed stock because funds do not like low liquidity stocks especially the sell side brokers. They are not able to introduce much to their clients as there are not much stocks to buy. That to me is changing for Ekovest. If I am to read right, some if not all portion of Haris Hussein's sale 6 months ago went to several funds.

As it is still at good value, I see the funds coming in a bigger way - as they are becoming visible for the bigger guys. That's how I see it as it is surfacing some of its value.

A follow up on MSC.

Many might have overlooked this news. Beside steels, tin production in China is actually going through process of de_overcapacity.
http://cn.reuters.com/article/home-tin-idCNKCS0V30TX

HOME专栏中国锡生产商加入减产行列 目的耐人寻味

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大宗商品专栏 

资料图片：中国宝钢一间厂房内存放的锡皮卷板。 REUTERS/Claro Cortes

撰稿/Andy Home

路透伦敦1月22日 - 中国的主要锡生产商已加入到减产的潮流中来，宣布今年将把产量减少1.7万吨。

就像中国其他基本金属生产商的减产声明一样，表面上看这是自律行为，但实际上它或许没那么简单。

但减产若得到落实，将有助于进一步收紧锡市。早在最近这波大宗商品价格跌势之前，锡市就已经面临结构性的供应问题。

锡市的紧俏表现为，伦敦金属交易所(LME)仓库的锡库存长期处于低位，结果导致近月价差持续面临着压力。

**减产实为求救**

据国际锡研究协会(ITRI)称，中国是最大的锡生产国，承诺减产的九家锡生产商的产量合计相当于中国总产量的约80%和全球产量的40%。

1.7万吨的减产规模等于在2015年锡产量基础上减少12%，相当于全球产量的4-5%。

但是，跟中国其他金属商宣布的协作减产举动一样，锡生产商这么做实际上是在向中央政府求救。

根据这九家厂商的说法。锡价“已与基本面相背离”，潜台词就是“目前锡价低迷不是我们的错，这是投机者造成的。”

面对这种市场不理性，厂商呼吁政府对锡进行战略收储。

而这才是上述声明的真正用意。

从目前北京与中国金属冶炼厂之间的搏弈来看，似乎是若要让政府救助，那么行业整体上必须减产能。

但一个明确的推论就是，中国锡冶炼商坐拥大量的未售库存。

考虑到已经存在的产出下滑，这说明了作为全球最大锡消费国的需求状况有多差。

的确，锡使用正面临自身的结构性挑战，即焊料微型化。而据国际锡研究协会(ITRI)，去年锡需求萎缩幅度估计略超3%。

这显然已经导致了中国国内市场的过剩，其中一部分已在过去几个月输往国际市场，不过是以一种未在中国贸易数据上体现的方式。

浏览印尼锡出口量图表，请点选(tmsnrt.rs/1WAgydZ)

**印尼出口仍在下滑**

讽刺的是，全球市场可能真的需要一些这种中国非正式的锡出口。

因为印尼的出口供应持续下滑。印尼是全球第二大产锡国，但却是最大的锡出口国。

根据印尼贸易部的出口公证检验资料，去年印尼的锡出口量降至70,154吨，低于2014年的75,927吨。这是连续第三年出口下滑，而且2016年只可能继续这个趋势。

锡出口的减少，是受到两个因素的联合作用，一是因为印尼政府逐步取缔邦加岛及勿里洞岛上的独立产锡商势力，一是锡的低价格。

值得注意的是，印尼商品及衍生品交易所(ICDX)几乎毫无成交，这个交易所实质上设有一个最低价格机制。

对于所有锡出口必须在ICDX交易后才能出口的规定貌似有所放松，因为尽管LME的锡价格徘徊在六年低点附近，该国照样有锡出口。

不过ICDX缺乏成交的事实显示，价格压力正在打击印尼锡生产商，其中许多都是小型私营公司。

在印尼之外的全球地区，在锡矿石品级下滑的情况下，其他大型锡产商多数都是采取以不变应万变。

近几年唯一重大的新增供应来源是缅甸，而缅甸的全部锡产量都运往中国，以弥补中国矿产量下滑。

综合作用的结果就是，虽然锡需求持续萎缩，供应萎缩速度可能更快。

**库存低，价差紧**

这股供应动能萎缩的影响明显见诸于伦敦市场。LME去年库存减少49%，或5,995吨，而目前的可交易库存(Open tonnage)为4,890吨，从任何过往水准来看都是偏低的。

大宗商品专栏 更多

• 《RUSSELL专栏》煤炭出口商担心中国停止去产能并允许国内煤矿增产
• 《KEMP专栏》对冲基金对油价的看多押注达到2014年夏以来高点

上海期交所在2015年3月推出锡合约以来，也没有太多锡进入上期所仓库。目前总注册库存仅有696吨。

值得注意的是，尽管近月合约价差益发收紧，LME库存仍维持在低水平。近月价差有好几个月时间在正逆价差之间反覆来回，但却未能吸引够多的金属让LME库存显着回升。

本周，价差再次出现收紧，指标LME现货/三个月期货价差周四收报每吨逆价差45美元。

市场盛传这是因为出现一个大型多仓。LME回溯前两日的仓位报告尚未反映出这一点，但鉴于库存如此之低，显然LME报告上也未必需要出现一个超大仓位才能有如此效果。

此外，未来三个主要月度交割日期的仓位分布高度密集<0#LME-FBR>。2月合约有四笔空仓将与四笔多仓对决，其中一笔多仓规模相当大，占30-40%的未平仓合约，相当于2,800-3,700吨。

这意味着未来可能有更多价差收紧的情况；在LME库存回升之前，逆价差仍将是伦敦锡市的一大特色。

**既是好消息，也是坏消息**

在这种全球整体情势下，中国承诺的减产，对锡价而言好坏参半。

好消息是如果中国减产数量符合承诺，虽然可能性有点低，那么这将解决掉全球供应链之中那个明显有供应过剩的环节。

因为其他任何地区几乎都没有供应过剩的迹象。

而在当前环境下，供应控制被视为价格相对表现强弱的关键决定因素，因此锡的条件便优于其他工业金属。

坏消息则是，中国生产商手上仍有大量未售出库存的意涵。否则他们为什么会要求政府开始收储？

因此未来几个月，只要上海--伦敦套利交易有利可图时，就有可能出现更多中国那种定位模糊的锡出口，如同去年第四季的情况。

在中国政府的协助下囤积锡，或许会化解出现更多中国锡出口悄悄外流的迫切风险，但并未真正解决上海锡价偏低的根本原因。

而减产会有效果，但中国当局会向中国产锡商要求多大程度的减产配合，作为伸出援手的交换条件，仍有待观察。(完)

(编译/审校 白云/王洋/李婷仪/陈宗琦/龚芳/高琦/蔡美珍/刘秀红)

Why I like MSC and it will be my largest exposure of stocks in 2017

First, I normally don't recommend stocks. But this rare gem really worth our studies. I share with all here the studies I have done and it is for references purposes only and it doesn't serve as any recommendation to buy or sell.

Why MSC-Malaysia Smelting Corp get my attentions?  A few reasons:

1. This stock is owned by one of the most famous value investors-Dr.Neoh.

From annual report 2015, he owns around 1.40%, another famous fund managers-ICAP owns around 2.90%

10.NEOH CHOO EE & COMPANY SDN BERHAD- 800,000 units=0.80%
13.DYNA􀀳UEST SDN BERHAD-600,000 units=0.60%

The shares are easy to calculate as it has share outstanding structure of 100mil exact. From the 2015 Annual Report, Top 30 shareholders had owned around 72.54% of the shares, making most circulating outside in market estimated to be only 27%

2. Most of the investors would have stop digging more once they have seen their results past 2 years. Most of the time it was volatile, and also at the same time in loos making.  Well I would say digging deeper we might understand more of this company.

This company is the second largest Tin producer in world after one in China (MSC is producing consistenly 30,000 Tonnes every year). Tin prices have been volatile since and MSC wrote off huge losses during last 3 years after the political risks surface in Indonesia and their venture in Indonesia was forced to a halt and they have no choice but to write them off.

Some write off still happens in recent quarter, but I think the amount left to be write off are really not that much anymore.

Look at Q2 2016 result, a one-off RM30mil write-off on associates occur.  Without this, the company is actually in profit for 1H 2016.

A further reading under notes, it states as such:

6. Share of results of associates and joint ventures

The Group’s share of results of associates and joint ventures recorded a net share of losses of RM30.53 million in 1H 2016 compared with a net share of profit of RM0.35 million in 1H 2015. This was mainly due to higher share of losses from KM Resources, Inc. arising from the provision of additional prior years tax liabilities

Without such one-off items, we can estimate the EPS to be around RM0.88 per year. Which makes its P/E look attractive at around 4 now.

MSC
Cash	208,028.00						EY	ROC
Receivables	40,930.00						35.6%	76.90%
Inventory	146,870.50
							Div
Total Liabilities	(367,539.00)	(2.3)	Mkt price	Graham Ratio	50.09		-	0.00%
	28,289.50	0.28	3.410	pie	7.08
Cash from Operation	158,000.00		-91.7%	NAV	2.53
Share Outstanding	100,000.00	1.58	341,000,000.00		1.70		Top30%
		46.3%					72.54%
							Butterworth, 40,000tonnes capacity
Borrowing	229,956.00	1.46					30209tonnes
EPS	0.880
P/E	3.88

Its strong cashflows generation of around 79mil YTD is even more fastinating. Making its EY, ROC at marvellous status.

Its liability is manageable with its strong cashflows generation, while the cash yielding is one of the craziest I have seen recent years beside the earlier identified KESM!
It is yielding even crazier than KESM when I notice it. KESM was yielding near 30% when I discover it in 2015 end. MSC is now yielding around 46% and can even be MORE due to recent TIN price rally, coupled with weakening currency of MYR.

3. TIN PRICE rally!
The most fundamental reason I am positive about MSC is due to recent rally in Tin Price.
Look at AR 2015, the company keep good track record on Tin prices for few years as below
Tin prices traded around range of  USD 20,000 actually recent years. But a crash on prices happen in 2015.

Tin price has since recover in 2016. As below for 2016
http://www.mtpma.org.my/index.php/statistic/2014-07-07-04-56-57
It has recently recover to near range of USD 20,000 which is why I am positive on their near future earnings.

OCTOBER 2016 TIN PRICES 

DATE	USD	RM	EXCHANGE RATE	TURNOVER
3	CLOSED	CLOSED	CLOSED	CLOSED
4	20,000	82,520	4.1260	28
5	19,850	82,276	4.1449	45
6	19,880	82,273	4.1385	44
7	20,020	83,243	4.1580	41
10	20,020	83,119	4.1518	58
11	20,050	83,324	4.1558	42
12	19,880	83,271	4.1887	38
13	19,880	83,794	4.2150	30
14	19,600	82,549	4.2117	46
17	19,580	82,686	4.2230	30
18	19,500	82,261	4.2185	25
19	19,800	83,051	4.1945	30
20	20,000	83,602	4.1801	38
21	19,900	83,560	4.1990	44
24	20,050	83,949	4.1870	23
25	20,100	84,028	4.1805	40
26	20,300	84,539	4.1645	53
27	20,500	85,885	4.1895	36
28	20,500	86,182	4.2040	34

Source : The Kuala Lumpur Tin Market (KLTM)

SEPTEMBER 2016 TIN PRICES 

DATE	USD	RM	EXCHANGE RATE	TURNOVER
1	18,900	77,103	4.0795	30
2	19,180	78,379	4.0865	31
5	19,330	78,741	4.0735	35
6	19,300	78,715	4.0785	43
7	19,450	78,996	4.0615	51
8	19,600	79,600	4.0612	25
9	19,600	79,684	4.0655	41
12	CLOSED	CLOSED	CLOSED	CLOSED
13	19,200	78,826	4.1055	28
14	19,150	79,128	4.1320	27
15	19,200	79,286	4.1295	47
16	CLOSED	CLOSED	CLOSED	CLOSED
19	19,200	79,344	4.1325	38
20	19,400	80,316	4.1400	42
21	19,480	80.676	4.1415	55
22	19,400	79,831	4.1150	66
23	19,450	80,163	4.1215	49
26	19,600	81,164	4.1410	68
27	19,600	81,036	4.1345	55
28	19,800	82,051	4.1440	36
29	19,980	82,288	4.1185	30
30	20,080	83,292	4.1480	52

 Source : The Kuala Lumpur Tin Market (KLTM)

AUGUST 2016 TIN PRICES 

DATE	USD	RM	EXCHANGE RATE	TURNOVER
1	17,900	72,146	4.0305	45
2	17,940	72,729	4.0540	43
3	18,000	73,125	4.0625	30
4	17,970	72,752	4.0485	27
5	18,080	73,070	4.0415	32
8	18,350	74,270	4.0474	42
9	18,200	73,444	4.0354	15
10	18,425	73,811	4.0060	31
11	18,550	74,360	4.0086	48
12	18,400	73,744	4.0078	34
15	18,250	73,553	4.0303	50
16	18,250	72,927	3.9960	31
17	18,300	73,182	3.9990	43
18	18,350	73,354	3.9975	26
19	18,430	74,089	4.0200	30
22	18,430	74,319	4.0325	45
23	18,480	74,484	4.0305	38
24	18,600	74,986	4.0315	40
25	18,600	75,032	4.0340	36
26	18,700	75,286	4.0260	26
29	18,700	75,501	4.0375	65
30	18,850	76,390	4.0525	47
31	CLOSED	CLOSED	CLOSED	CLOSED

JULY 2016 TIN PRICES 

DATE	USD	RM	EXCHANGE RATE	TURNOVER
1	17,080	68,115	3.9880	57
4	17,500	69,939	3.9965	45
5	17,930	71,792	4.0040	26
6	CLOSED	CLOSED	CLOSED	CLOSED
7	CLOSED	CLOSED	CLOSED	CLOSED
8	17,550	70,986	4.0448	28
11	17,901	71,362	3.9865	78
12	17,800	71,191	3.9995	41
13	17,990	71,717	3.9865	31
14	17,900	70,825	3.9567	31
15	17,990	71,186	3.9570	56
18	17,940	71,444	3.9824	31
19	17,850	71,195	3.9885	33
20	17,700	71,101	4.0170	45
21	17,900	72,432	4.0465	32
22	17,870	72,695	4.0680	23
25	17,800	72,677	4.0830	36
26	17,800	72,576	4.0773	31
27	17,900	73,082	4.0828	54
28	17,900	72,737	4.0635	28
29	17,900	72,656	4.0590	52

Source : The Kuala Lumpur Tin Market (KLTM)

4. Selling of lands in Penang factory to unlock value??

I read a recent news from the edge daily. There was rumors where MSC might reallocate their smelting factory from Penang state to Klang as the land in Penang could be redeveloped into properties to unlock their values. If this happen, I am not sure if it might impact their temporary functions? But CEO resigning from company is a big warning sign to me. Could it be tussle of wars among Malaysian and Singaporean? Or is there other things? I wouldn't want to do any estimation. But if reallocate did happen will be extra bonus to us.

5. Price recover back past 2-year record at RM4 range?

Look at its price during 2012 when it was trading at RM4.50 high. I believe with no much write off can be further done on associates, its near future result can be very fascinating.

Its investment in associates as noticed in latest quarter result report is RM49.78mil, compared with Dec15 RM84.47mil. MSC, come and write off the balance. So the price can go further down and next year it will boom like mad.

Assuming next yr no more write off, EPS of 0.80 at P/E 10 can easily give it RM8 TP.

Its cash yielding is around RM1.58 per share per year. By that, it should be easily traded at range of RM15-RM18.

In near term using recent latest results, I think it can challenge EPS of RM1, giving P/E 10=TP RM10

EPS RM1 derived from below

30,000 tonnes capacity per year x Avg price per tonnes USD19,000 x MYR 4 x profit margin around 4.5%=RM102.6mil net profit.

S/O=100mil, so easily EPS=RM1 per year. P/E can be even lower near 3 next yr.

EVEN, we are so pessimistic that It will by Maximum goes back only to 2-3 years high of RM4.50 range, it will still give us around 32% return.