If it isn't apparent enough, the industry environment has normalized enough so much so that the trailing 4 quarters valuation will keep trending down from 13x now to 5x eventually.

By then i guess those who stayed by the sidelines will wonder, why is the second biggest tin producer in the world trading at such cheap valuations?

MSC looks primed to report good results. Why?

1) Huge asset impairments done due to past diversifications and/or investments. Look into the annual reports and you can see that management is strictly sticking to tin smelting and mining only.

2) Tin prices has rebounded strongly since 2016. With tin prices at 20,000 USD, the tin mining division is thriving and at 2,200 tonnes mined a year with cost of production at RM60,000, this division will comfortably make in excess of RM45 million a year net of tax.

3) While ore purchases are done in USD and sold in USD, there is a natural hedge against foreign exchange gains and/or losses. For mining, costs are in ringgit and the ores are sold between inter-companies to the smelting side, in USD.

So why is MSC incurring huge foreign exchange losses especially when USD surged in 2015 particularly. It has got to do with hedging contracts whereby according to annual report, a 1% increase in USD will diminish profit by 2-3 mil ringgit.

However, these are strictly once offs and it is not operational, rather tied to quarter to quarter fluctuations in the exchange rate, as opposed to recurring losses. In another words, the losses will only occur if the exchange rate has increased say 5% from quarter to quarter and no losses if the USD stayed stagnant quarter to quarter.

With no more asset impairments, tin prices staying strong with balanced market supply and demand, coupled with stabilizing USD to the MYR, MSC is primed to record PAT of 70-80 mil Ringgit for FY2017.

A hedge fund manager with impeccable track record once said, if i do good valuation work, he guarantees that the market will agree with me. He just doesn't tell me when.

So to the naysayers, enjoy the victory while it lasts. The market will prove eventually by investing in Success, I will be right and you will be wrong.

Good good, continue hating on a solid company with cheap valuations. I love the hate. Cause mama told me, one man's thrash is another's treasure.

Ok have a good break!

Please respect suregain, he makes money out of every trade. My idol.

Hahaha you guys so funny

Happiness = reality - expectation. Love it how the present is so far away from reality, and how expectation is so understated.

3.22?!!! Market finally wake up to this stock???!!!

One of the cheapest stock in Bursa right now!

TP: RM4.20

According to the edge weekly, Success is number 19 best performing stock YTD for 2017. Furthermore all LED associated counters are running like mad, while Success will be a slow turtle and continue to appreciate in value once people come to terms of their recovery of earnings and strong LED growth.

2 quarters away i mean

Quite confident that profit even netting off the 4 mil forex gains (on the assumption that we treat it as strictly once off, and with SEB contribution being muted and insignificant (for the sake of being conservative and with additional kicker if it performs), Success is primed to make very close to RM50 million a year PATAMI for FY17 (2 months away). At 10x PE (not unreasonable for a company doing close to 20% growth), Success should technically trade at RM4.28.

10x PE is again quite conservative as other LED stocks are trading at 12-15X PE. There's a theoretical upside of 40% but with additional kickers from recovery from SEB + PE expansion + outperformance of expectations.

Once upon a time, someone blogged that Success has poor cash flow and the profit was not as good as it seems so in order to dispel that rumour have a look at the financial position of Success:
Q42015: Net debt equals RM63 mil
Q42016: Net debt equals RM8 mil.

55 mil worth of debt was pared down over the course of a year. Once this company turns net cash, then i guess the EV/EBIT or EV/EBITDA valuation will deserve a rerating.

hrm wonder y my comments were deleted. did i say offend anybody?