In my personal view, I believe MSM's share price hasn't fully factored in a recent and vital information that it's receiving sugar subsidies/incentives of RM1 per kg. This incentive totals RM24 million monthly, and if sustained, it would reach RM288 million annually.
See page 22 of its recent 3QFY23 presentation slides attached.
The monthly subsidy will end up RM288m/year and if we assume RM120m net losses/year with subsidy, the net losses will turn into profit of RM168m! Let's say we give 10x PE, the market cap should worth RM1.68bn or RM2.4/share at least! This is exactly how the scenario looks like when gov was giving subsidy for chicken and egg farmers previously and sparked the rally in poultry stocks such as TeoSeng, LeongHup, LayHong etc
there is always months of delay for gov to finalise the price hike mechanism and hence the subsidy will persist. The price hike will also result the same profitability as subsidy for MSM, that's the gov direction now
MIDF has revised its revenue estimates for MSM higher by 25% for FY2023, 39% for FY2024, and 60% for FY2025, based on the new ASP and sales volume assumptions.
Luisa just my opinion, consume & trade market totally is diffrence. Another worries is about the subsidy from gov.. Seem like there was no update about the subsidy for next year which mean another week from now. Is it possible gov not subsidy anymore?
government definitely will do something, but maybe takes time, coz our sugar price still the lowest among region, and many sugar refiner will close down soon if the selling price still remain so low
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5354_
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Posted by 5354_ > 2023-11-23 09:42 | Report Abuse
Chicken subsidy no more in November please transfer to sugar subsidy if PM-X want to remain in power for 5 years.