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One of our top 10 gem. 

 

MSM (5202)

Opportunities

1. World number 8 largest sugar refiner by capacity

2. Benefit from the recent trade war, India vs China and China vs Australia.

India world largest 3rd exporter getting decreased

3. Recent demand from China, South Korea, South East Asia, New Zealand and Australia increasing their demand to 39% of export revenue

4. MSM to export 200,000 tonnes of sugar until the end of 2020.

5.  Management said going forward to focus more on export to utilize Johor capacity for export

6. Removal of irregularities Director

7. Recent Takeover from FELDA to FGV will cause FELDA to takeover MSM in the near term? More than 60% of shareholders from FELDA, FGV, Amanah Saham, etc.

8. Recent rumours that Syek Mohktar interested sugar business as well. Will BERNAS to counter offer MSM?

9. Sweetener product launch in July 2020 with the brand of Premium Prai. Target to those for low sugar intake. Online sales via Shopee and Elewsmart is available.

 

Drawbacks

* Sugar categorised as controlled items in Malaysia, therefore low margin for local sales

* local sales consist of 61%

* Net debt company

* No dividend

* Suffered losses for few years due to high depreciation and impairment and irregularities of accounting losses

 

Comment

Expect the company to turnaround on FY21. The company fell from RM5 during FY2016 to as low as RM0.23 during March 2020. Felda new appointed director to turnaround the company. With recent weak USD, stronger RM able to offset the price of sugar material.

 

https://www.bloombergquint.com/technology/raw-sugar-futures-set-for-biggest-yearly-advance-since-2016

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Disclaimer
This information only serves as reference information and does not constitute a buy or sell call. Conduct your own research and assessment before deciding to buy or sell any stock

Stay One Step Ahead of the Market, Follow us on Telegram:

https://t.me/klseinsidertips

 

Disclaimer
This information only serves as reference information and does not constitute a buy or sell call. Conduct your own research and assessment before deciding to buy or sell any stock


https://klse.i3investor.com/blogs/MSM/2021-03-12-story-h1542150016.jsp

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