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.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Justaboylearning
98 posts
Posted by Justaboylearning > 2023-11-23 08:32 | Report Abuse
Mainstream media yet to report .
So buy the hype sell the news ?