PETALING JAYA: Malaysia Smelting Corp

Bhd (MSC) is expected to take advantage of the long-term global tin market, as the tin sector is showing signs of strong recovery, according to Apex Securities.

MSC is a producer of tin metal and tin-based products, owning one of the largest and oldest tin mines in Malaysia through its wholly owned subsidiary Rahman Hydraulic Tin Sdn Bhd.

Apex Securities said MSC is poised to benefit from steady demand and constrained supplies, as tin prices surged to a multi-year high of RM170,660 per tonne in the first month of financial year 2025 (1M25).

Despite easing to RM151,386 per tonne in 5M25, tin prices remain significantly higher than the 10-year pre-lockdown average of RM82,000 to RM92,400 per tonne and are forecast to climb a further 7% to RM146,000 per tonne in financial year 2026 (FY26).

Apex Securities explained in a note to clients that the tight supply situation stems mainly from Myanmar’s export ban, environment, social and governance (ESG)-driven mining restrictions in Indonesia and Africa, as well as the continued decline in ore grades globally.

MSC delivered a record-high total revenue of RM1.7bil in FY24, underpinned by an average tin price of RM138,500 per tonne against RM118,100 per tonne in FY23, alongside higher refined tin sales volume.

Apex Securities believes the uptrend will persist amid the proliferation of electric vehicles, rise in consumption of electronic devices and the global push towards ESG-related initiatives.

It pointed out that MSC’s core earnings growth will be fuelled by stable output levels supported by consistent mining and smelting operations, favourable metal price movement and ongoing cost optimisation.

“The decommissioning of MSC’s legacy Butterworth smelter unlocks approximately 40 acres of prime waterfront land, carrying an estimated gross development value of RM4.6bil which is being redeveloped into Straits City.”

The research house added that the group’s new Pulau Indah facility will strengthen its capacity to capitalise on market dislocations, backed by greater efficiency and stronger ESG compliance.

Apex Securities initiated coverage on MSC with a “buy” call and a target price of RM1.51 pegged to a 12 times price-to-earnings (PE) multiple on FY26 earnings per share of 12.6 sen.

On MSC’s valuation, it said the assigned PE multiple reflects a 19.5% discount to selected smelting peers’ average of 14.9 times, accounting for its smaller market capitalisation and lower trading liquidity.