Being the largest ferroalloy smelter in SE Asia and top 3 globally (ex China), with supercycle and alloy prices at highest level ever, how can this stock still be lagging at current level - 30% below its recent high of A$1.70 (RM 5.30)

The company IR effort and the lack of understanding of capital markets and what makes an investor ticks, is really Omh’s archilles heel

I agree that the company IR or the people in charge of IR needs to be more active to really get the good news out to the market.

The shorter is sure persistent to want to keep below rm3.70 hoping for some desperate soul to sell out to him and collect cheap…vol will be Low at this level as not many wants to sell now at current alloy prices and the kind of GPM that the company is enjoying

Entry permit for foreign workers are gradually being approved by the authorities, albeit the pace of approval is slow. But at least the process has started.
Company is hopeful the manpower issue will gradually improve and full production is expected in 2022

3Q Operation Results out now: FeSi production up 45% from 2Q, and MnSi up 57%.
FeSi alloy prices was up at US$4,125 /ton end Sep (from US$1,920 end Jun) and MnSi at US$1,615 /ton

This is big profit figures by any standard

Simple maths:
75% capacity: GPM 400k ton x US$1,000 = US$400m
100% capacity: GPM 500k x US$1,000 = US$500m

Even without the expansion in 2023, the gross profit margin of US$1,000-2000 / ton is enough to boost the profit by many folds.

OMH is now operating at 75% capacity producing 400k tons of ferroalloy. At 100% capacity, they will produce 500k tons of ferroalloy which they are likely to achieve by early 2022 when they can bring in skilled foreign workers from China.

Fundamentally, this stock will make superb profit, as they are booking US$4,000/ton sales in 1Q2022. Those booked in 4quarter are all committed and prices probably range from US$2,000-4000/ton. This is big margin.

This is how short seller brings down the price…

They are in such a superb position to ride the market upside especially when you reference to the super high ferroalloy prices. Yet this is still lagging at Low single digit forward PE

I agree fully with you that the investor relations for this company is super lagged (not a bit) especially before Bursa listing. It has improved but needs plenty to work on…

So you can see the queue to sell below 3.70 is only 3-5k, and the 3.70 block (35k) is to ‘show’ the market there is selling pressure and hopefully more retailers can sell to him at around 3.60

This was quite similar when OMH was shorted at A$0.70 -$0.80 2months ago on ASX before the move up to A$1.15-1.20 squeeze out the short.

Clever short seller at play: bring down the price to collect at 3.61 - 3.57 with big queue to buy. And if you notice the queue to sell is so little. Typical short seller play now

That means another 100k ton/pa of ferroalloy. At current GPM of US$1,900/ton, that would mean additional profit of US$190m. Even at conservative GPM of US$1,000/ton, the additional GPM would be US$100m!!!

This is good news! We should expect full production for
OMH soon, most likely in 2022

Malaysia government has agreed to let fully vaxed foreign workers to the plantation sector. The quota and entry dates details for other industries are being worked out.

I buy into both counters…it’s commodity super cycle (Goldman Sachs)

You will see multiple folds contributions in 2H2021 and definitely a super profit for FYE 2022

You can get more information on OM Sarawak easily as OM Holdings (OMH) is also dual-listed on Bursa.

3Q results will give a hint of what is to come in 2022, as alloy prices in 3Q2021 is moved higher to US$2,000/ton but still not reflecting the current high.

Om Sarawak makes only RM120m in 1H2021 based on Low alloy prices averaging US$1,350/ton for the period. It has since ballooned to US$4,125/ton and going higher.

US FeSi is now US$3.20/lb or US$7,053/ton!!! It’s unbelievable

This could be a decade long commodity super cycle.

Goldman Sach, Jeff Curie interview:
- Despite tighter markets and higher prices, commodities remain under invested
- Upside risk on commodities on 1H2022
- Oil will likely be the catalyst to get investors back into commodities and reflation trade
- Oil could hit $90 if winter is colder than normal
- Now is the time to get into commodities

This will be a big booster for CMSB profit in 2021, and more so in 2022 and beyond

At 100% capacity, which they will achieve in 2022 when Malaysia opens it border, it will produce 500k ton pa

OM Sarawak now produces 380k ton of ferroalloy at 75% production, with average GPM of US$1,500-2,000/ton

If OM Sarawak makes Us$400-500m of profits, CMSB share of profit will in in the range of US$80-100m!!!!

The ferroalloy prices has skyrocketed from US$1,000/ton in 2020 to over US$4,000-4,500/ton now

Agreed! Don’t forgot also CMSB will be benefiting hugely from its 25% stake in OM Sarawak

Thanks to the short, you can get off him at this price.

The short will likely keep the price at RM 3.77-3.75 until it covers back its position.

In the light of China climate agenda, unlikely they will want to subsidise a Low value add, yet high power usage and polluting industry.

The best result for OMH will come in 1H2022 when the high alloy prices are being fully reflected. And it will be released end Aug 22

If you have 3-6month timeline, it’s safe level to enter.

https://www.omholdingsltd.com/wp-content/uploads/2021/10/2021.10.07-Euroz-Report_Weekly-Informer_07Oct21-Extracts.pdf

One interesting point is that If they use current alloy prices of US$4,150/ton, the estimated EbItda is A$520m for FYE 2022 and A$840 post expansion. And the spot valuation is A$5.25 / share

Euroz Australia published another report with TP at A$1.37 (RM4.24) Oct 5

It appears that short seller pushing down to try and cover its position below RM 3.80

Ferroglobe (loss making) (RM6b) is 2x bigger than OMH

Lynas (RM 20b) is 7x bigger than OMH

Yet the market cap for PMetal (RM 49b)is 17x bigger than OMH (RM2.9b)

The potential profit will exceed the profits of PMetal, Lynas, Ferroglobe all combined

That means the GPM will be about US$660m at 75% capacity and US$875m at 100% capacity

Current Ferroalloy prices translates to average GPM of US$1,700-1,800 /ton. OMH produces 380k ton currently at 75% capacity. It will produce 500k ton in 2022 when Malaysia opens its border in Dec 21.

Both FeSi and MnSi China futures up 6-7% yesterday