PETALING JAYA: Malaysia Smelting Corp
Bhd’s (MSC) sand-tailings scavenging plant remains on track for commissioning by the third quarter of financial year 2026 (3Q26) and is expected to increase mining output, supporting higher self-generated feedstock.
Following a recent briefing by MSC, Apex Securities Research said the integrated smelter’s management targets an ore feed intake of about 21,000 tonnes in financial year 2026 (FY26), supporting a gradual recovery in smelting utilisation.
Upon full ramp-up, the facility is expected to increase mining output from around 10 tonnes per day to 14-15 tonnes per day, implying a potential 40% to 50% increase in production, the brokerage noted in a report yesterday.
Given the relatively low incremental labour and energy requirements, Apex Research expects the majority of the additional output to flow through to earnings.
“We view this positively as it accelerates MSC’s strategy of increasing self-generated feedstock while enhancing the profitability and sustainability of its mining operations,” it added.
The facility will also enable ore concentrate to be converted into crude tin metal at the mine site before being transported to MSC’s Pulau Indah smelting plant for final refining.
Besides improving logistics efficiency and reducing transportation requirements, management estimates the project could effectively release about 10 tonnes per day of smelting capacity at Pulau Indah.
“We view this positively as it strengthens vertical integration, enhances utilisation of existing infrastructure and provides greater flexibility to accommodate future increases in feedstock volumes,” said Apex Research.
The brokerage, which maintained MSC’s FY26-FY27 earnings forecasts, said the operational updates discussed during the recent briefing remained broadly consistent with its existing assumptions.
While management’s commentary provides greater visibility on project execution and feedstock procurement, Apex Research noted that “the anticipated earnings contribution from these initiatives has already been incorporated into our forecasts”.
Therefore, the brokerage made no changes to its estimates.
Apex Research maintained its “buy” call on the stock with a target price of RM3.06 per share.
“We continue to favour MSC given its unique positioning as the world’s largest independent tin smelter, growing contribution from self-generated feedstock and increasing integration across the tin value chain,” it added.
The brokerage also believes that the applied multiple remains justified by MSC’s improving earnings quality, rising mining contribution and lower reliance on third-party feedstock, which should support greater earnings resilience relative to pure smelting businesses.
The key downside risks to its call include tin price volatility, feedstock supply disruptions and delays in commissioning the sand-tailings facility, which could affect margin recovery and operational performance.
