KUALA LUMPUR (March 9): Malaysia Smelting Corporation Bhd’s (KL:MSC) is set to benefit from structurally elevated tin prices, with Apex Securities revising its price assumptions upward amid persistent global supply tightness.

The research house said it had previously underestimated the persistence of supply-side disruptions, noting that policy-led production curbs in Indonesia, elevated geopolitical risks in the Democratic Republic of Congo, and a slow recovery in Myanmar are expected to keep supply constrained over the medium term.

"Accordingly, we raise our tin price assumptions by 2.9%/3.0%/3.3% to US$36,100/US$38,300/US$40,700 per tonne for FY2026/FY2027/FY2028 (from US$35,100/US$37,200/US$39,400 previously),” it further said in a note on Monday.

Following the upward revision, Apex Securities also upgraded the company’s earnings forecasts, lifting core net profit projections by 10.5%/13.4%/16.9% to RM153.1 million/RM195.2 million/RM269.1 million for the financial year ending Dec 31, 2026 (FY2026), FY2027 and FY2028 respectively.

Looking ahead, the company has constructed a new processing plant to extract tin from the mine’s sandy tailings, which is expected to commence operations in April 2026 and increase production assumptions from 11 tonnes per day to 14 tonnes per day.

The company is in the midst of decommissioning its old smelter plant in Butterworth. “Cost savings from the closure and improved efficiencies at Pulau Indah will improve our bottom line”, Lam Hoi Khong, the company’s co-chief executive officer, said in a statement on Feb 23.

For the full FY2025, net profit rose about 3% to RM81.97 million while revenue was up 4% to RM1.76 billion thanks to sales of tin-bearing intermediates and by-products. During the year, the average tin price per metric tonne was also higher at RM146,100 versus RM138,500 in FY2024.

The company declared a final dividend of four sen per share, bringing the total dividend for FY2025 to eight sen per share, representing a payout ratio of 82% of its net profit.

There are now three ‘buy’ and one ‘hold’ calls on the stock. The consensus target price is RM2.12, based on the average of the four research houses tracked by Bloomberg.

Therefore, Apex Securities maintained its ‘buy’ call on the company, raising its target price to RM2.37 from RM2.14 previously, citing operational efficiency gains and structural cost savings as key drivers of earnings recovery.

Malaysia Smelting Corp ended Friday trading on Bursa Malaysia at RM1.90 per share, giving the company a market capitalisation of RM1.60 billion.