2022-08-18 03:40:30
Technical tracker - HLIB Retail Research –18 Aug 2022
MSC: Tin – an essential metal
Integrated producer of tin metal and tin-based products. Listed in 1994, Malaysia Smelting Corporation Berhad (MSC) is currently one of the world's leading integrated producers of tin metal and tin-based products and a global leader in custom tin smelting. Through its 80% owned subsidiary RHT, MSC operates the largest hard rock open-pit tin mine in Malaysia, located in Klian Intan, Perak. For its tin smelting operations, MSC will gradually phase out its Butterworth Smelter and migrate its operations to the new smelting plant in Pulau Indah (with 50% higher smelting capacity of 60k/mt) and lower production cost (c.20% cost savings).
Bumpy road ahead but likely to trend sideways after recent slump. To recap, tin prices made a U-turn after hitting an all-time high of more than USD50k in March as global demand was dampened by aggressive monetary policy tightening in most major economies and China's (the world's largest tin-consuming country) zero Covid-19 policy. Market consensus expects tin prices to stay fragile in the near term, given the weak macro environment. In such a lacklustre sentiment, MSC's share prices has slid 62% from the 52-week high of RM5.45 to RM1.98 yesterday as market fears further earnings downgrade. However, we reckon this will be partially cushioned by (i) higher mining output and efficiencies (FY22 target: 12mt/day vs 1QFY22 9.5mt/day) and (ii) improve yield and cost savings in the smelting segment on the back of the operations of Pulau Indah smelter; (iii) the appreciation of USD against ringgit (leads to higher average tin prices in MYR terms).
Long run: supported by robust tin outlook. In the long run, the demand for tin will remain robust, given its key component in the technology era, including the fast-growing adoption of electric vehicles and solar PV. Meanwhile, tin supply might deteriorate following the thin pipeline of tin mining projects coupled with Indonesia's (2nd largest tin exporter) government planning on stopping its tin export, causing a structural supply deficit and supporting tin prices. With this, we reckon long-term tin prospects remain intact and advocate a buy-on-weakness stance for MSC.
Building a base. Technically, MSC is building a base near the RM1.80-1.95 long-term support area. A decisive breakout above RM2.36 will form a double bottom and spur the price toward RM2.77-3.00. Cut loss at RM1.66.
Collection range: RM 1.80-1.86-1.95
Upside targets: RM 2.36-2.77-3.00
Cut: RM 1.66
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MSC：锡- 重要的金属之一
锡金属和锡基产品的综合生产商。马来西亚冶炼公司 (MSC) 于 1994 年上市，目前是世界领先的锡金属和锡基产品综合生产商之一，也是定制锡冶炼领域的领导者。通过其 80% 的子公司 RHT，MSC 经营着马来西亚最大的硬岩露天锡矿，位于霹雳州的 Klian Intan。其锡冶炼业务，MSC 将逐步淘汰其 Butterworth Smelter，并将其业务迁移至 Pulau Indah 的新冶炼厂（冶炼產量提高 50%，达到 60k/mt）并降低生产成本（节省约 20% ） .
股价近期暴跌后可能会横盘整理。回顾一下，由于大多数主要经济体收紧货币政策和中国（世界上最大的锡消费国）实施零新冠肺炎疫情，全球需求受到抑制，锡价在 3 月份创下逾 5 万美元的历史新高后出现了大幅回落。鉴于如此疲惫的宏观环境，市场共识预计短期内锡价将保持低迷。这低迷的情绪加上市场担心盈利的进一步下调，MSC 的股价从 52 周高点 RM5.45跌至昨天的 RM1.98 ，总跌幅高达 62%。然而，我们认为这将缓冲于 (i) 更高的采矿产量和效率（22 财年目标：12 公吨/天，而 2022 财年第一季度为 9.5 公吨/天）和 (ii) 提高冶炼部门的产量和成本节约来部分缓解其逆风。 (iii) 美元兑令吉升值（导致以马币计算的平均锡价上涨）。
锡在长期有强劲前景支撑。从长远来看，鉴于锡在科技时代的关键组成部分，包括电动汽车和太阳能光伏的快速增长，锡的需求将保持强劲。同时，由于锡矿项目稀少，加上印度尼西亚（第二大锡出口国）政府计划停止其锡出口，锡的供应可能恶化，导致结构性供应短缺并支撑锡价。有鉴于此，我们认为长期锡的前景保持不变，并对 MSC 采逢低买进的立场。
建立支撑。从技术上讲，MSC 正在 RM1.80-1.95 长期支撑区域附近建立一个支撑。股价若决定性突破 RM2.36 将形成双底并推动价格向 RM2.77-3.00。投资者可把止损设置在 RM1.66。
买入范围：RM 1.80-1.86-1.95
上行目标：RM 2.36-2.77-3.00
止损：RM 1.66
Report: https://www.hlib.hongleong.com.my/Published/Download.ashx?ArticleId=19166&mode=view
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