PETALING JAYA: Apex Securities Research has cut its net profit forecast for Malaysia Smelting Corp
Bhd (MSC) by 21.4% to RM121.9mil for the financial year 2026 (FY26), despite its first half (1H26) numbers coming in within consensus.
This downward revision is primarily due to an updated ringgit US dollar exchange rate assumption, which was adjusted to RM4.03 from RM4.15 to align with latest economic forecasts.
Some 97% of MSC’s sales are export-driven and denominated in the greenback and a stronger ringgit results in lower reported revenue upon conversion.
“The impact on the bottom line is further amplified by the tin miner and smelter’s operating leverage,” Apex Research noted.
Despite the downward forecast adjustment, MSC’s recent financial performance has held up with the group reporting a second quarter (2Q26) core net profit of RM33.9mil, which took its 1H26 core earnings to RM76.8mil.
On a quarter-on-quarter (q-o-q) basis, core net profit declined by 21.1%, as stronger mining earnings were more than offset by a sharp decline in smelting profitability.
Revenue grew 39.4% q-o-q to RM637.3mil, driven by higher tin prices and sales volume, but smelting pretax profit slumped 75.6% due to lower encashment of tin intermediates and forex translation losses.
MSC’s tin mining segment’s pre-tax profit rose 7.1% q-o-q to RM59.1mil, supported by an average tin price of RM208,400 per tonne.
The 2Q26 core net profit surged by 142% on a year-on-year basis, largely due to a low base effect in 2Q25 when smelting activities were disrupted by a gas pipeline fire event at Putra Heights.
Apex Research maintained its “buy” call on MSC with an unchanged target price of RM3.06 a share.
On the demand side, global tin consumption remains underpinned by AI and data centre applications, semiconductors, photovoltaic panels and other energy-transition technologies.
Apex noted MSC’s management has guided towards a positive outlook but stated the ongoing Middle East conflict has driven energy prices higher, adding to cost pressures across both segments.
“The group continues to benefit from efficiency gains at the newer Pulau Indah TSL (top submerged lance) furnace following the closure of the Butterworth plant. On the mining front, management remains focused on raising daily output, expanding resources and adopting lower-cost processing methods to recover tin from lower-grade material,” the research house stated in its latest report on the tin concern.
MSC’s tailings scavenging plant has been physically completed and is currently undergoing commissioning, with output expected to ramp up ahead of end-FY26.
The Rahman Hydraulic Tin mini-smelter remains on track for completion within FY26, with operations expected to commence in FY27.
The valuation is based on a 13x price-to-earnings multiple pegged to its FY27F earnings per share of 23.5 sen.
The research firm continues to favor MSC due to its unique position as the world’s largest independent tin smelter and its improving earnings quality as mining contributions increase in a high tin price environment.
Tin prices remained elevated in 2Q26, supported by tight supply conditions in Indonesia, Myanmar and the Democratic Republic of Congo, where regulatory, geopolitical and operational challenges continue to constrain production.
