MSC above $5.20 by 29-Jun-2012

  • target price: $5.20 ( 10.40 % in 131 days)
  • price when predicted: $4.71
  • current price: $3.62
  • 1937 days pass target date.
MSC's chart looks very positive with the price staying above the 200MA line for the last few weeks. One can expect further appreciation in the coming weeks due to the following factors:-

(a)50MA daily)will cross above 200MA line soon, chartists call this Golden Cross indicating bullish trend
(b) Tin price has risen to the region of + or - USD25,000 per ton,and possibly beyond in the next few weeks because of tight supply situation
(c)Impending good result announcement with declaration of a final dividend of more than 15 sen
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I Think So

Not Likely

Comments

Unfortunate! Unfortunate! MSC 4Q2011 results was disastrous. Instead of the expected bumper profits, it turned in a humongous loss of 46 sen per share. However, the whole year earning is still attractive at 61 sen. A final dividend of 18 sen was declared (interim 12 sen)

The loss was unexpected and was beyond the control of the management. It was incurred by the Indonesian subsidiary Koba Tin. The Indonesian Government banned the export of tin in Oct 2011 for a few months in order to prop up tin prices. The ban affected production and sales revenue. In addition there were some impairment write down of investment.

Despite 4Q losses, MSC is still solid financially and future earning will improve as sales and production in Indonesia return to normal.
MSC: Do not worry too much about the 4Q11 results and the share price. More than 25 sen per share of losses are due to impairment write down. These are paper losses which had been paid for and do not actually affect cash flow. This means the actual income flow in 2011 is 86 sen per share(61 + 25). A glance at the company's cash flow table reveals that the the cash position has increased from RM119 million last year to RM235 million by end of 2011.
MSC's latest development: The company took in an Indonesian partner with a stake of 23% in its Indonesian operation PT Koba. That shareholding will later increase to 50%. On the surface, MSC is losing out because its shareholding is being diluted. However, this move is necessary for the following reasons:

a) MSC's tin mine in Indonesia is expiring in 2013. Local partnership is part of government's requirement for licence renewal.
b) New local partner will assist acquisition of additional mine

So, it is a win-win situation for longer term benefits. One must bear in mind, Indonesia is the World's largest tin exporting nation. China, though is the largest producer of tin in the world, uses up everything.

(This article is for information only and represents author's own opinion. Please do your own research if you are intending to buy or sell MSC)
again, here i found another of your Holland Boat. can you show me which of your prediction that turn out to be right?
are u trying to be another Salvatore Dali?
There is no need to worry about 1Q2012 results of MSC. Here is the reason for the poor performance.

"The management’s on-going efforts to turn around Indonesian subsidiary have seen the progressive closure of expensive pits, which led to lower tin volume in 1QFY12. Given PT Koba Tin’s legacy of high fixed cost of USD2.5m per month, the lower volume translated into higher units, and consequently a huge loss. With its turnaround plan well in progress plus the commissioning in stages of its cheaper cost cum higher quality pits, we expect this subsidiary’s losses to ease in the upcoming quarters".

I personally believe the earning will turn around to a much better set of figures by 2Q or 3Q. Over a longer term, MSC is still a good investment. Just for information, iCapital holds a total of 2.9 million MSC shares. They bought the shares in 2010 and 2011.
Over a long, long term, perhaps. But not in 44 days.
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