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This article originally appeared in The Edge Financial Daily, [23 juillet 2009]
+ A MSM Malaysia Holdings Bhd
(July 20, RM3 .62)
Maintain neutral with a target price (TP) of RM3.86: We visited MSM Malaysia Holdings Bhd Sugar Refinery which is located in the Tanjung Langsat Industrial Complex, Pasir Gudang in Johor. During the visit, we find that the new refinery is nearing completion.
Operationally, it received its first batch of raw sugar exceeding 40,000 tonnes and the company began processing raw sugar.
Once completed, MSM's annual refined sugar production capacity will be increased from one million tonnes to 2.25 million tonnes (currently 1.25 million tonnes).
With the completion of the refinery, MSM will be the largest sugar refiner in Asia. Note that MSM has invested US $ 259 million in the refinery.
Overall, we expect a recovery in earnings for MSM during the 2011 fiscal year with an estimated after-tax profit of RM 97.1 million (vs. RM 32 million after-tax). ). (19659005) For fiscal year 19, we maintain our estimated profit at 129.1 million RM
Our TP is based on 21 times the net earnings per share of 18.37 sen. The forward yield of 21 times the standard deviation is based on a standard devaluation of +1.0, as we expect a recovery in earnings during fiscal year 18.
Despite the recovery of profits, the question of Thai sugar smuggled could limit the rise in stock prices in the short term. – MIDF Research, July 20th
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