MSC: Strong Q3 Performance Driven by Tin Market Strength and Operational Efficiency

An investment holdings company, deeply involved in tin mining and smelting, recently unveiled a strong financial performance for the third quarter of its fiscal year 2025 (3QFY25).

Performance Overview

The company reported a significant 42.7% year-on-year surge in net profit, reaching RM20.4 million for 3QFY25. This robust performance contributed to a cumulative nine-month (9MFY25) net profit of RM42.1 million. The results largely met analyst expectations and notably exceeded consensus forecasts, achieving 74.3% and 80.0% of the firm’s and consensus’ full-year estimates, respectively.

Revenue for 3QFY25 also saw a healthy increase of 12.7% year-on-year to RM529.5 million. This was primarily driven by a higher sales volume of refined tin and tin bearing intermediates, coupled with an elevated average tin price of RM143,500 per metric tonne, up from RM141,500 in 3QFY24.

Driving Factors

The strong profit growth was primarily fueled by robust contributions from both the tin smelting and tin mining segments. The tin smelting segment significantly narrowed its loss after tax (LAT) to RM1.6 million, a substantial improvement from RM10.3 million in 3QFY24, largely due to increased sales of higher-margin tin intermediates. Concurrently, the tin mining segment’s profit after tax (PAT) rose by 21.4% year-on-year to RM24.4 million, benefiting from enhanced tin production and favorable average tin prices. The company’s strategic focus on boosting mining output and improving overall productivity through operational efficiency also played a key role in these positive results.

Market Landscape and Challenges

Global tin prices have been on an upward trajectory, reaching approximately USD37,000 per metric ton. This trend is supported by a tight supply outlook and strong demand from the electronics and data center industries. Despite these favorable market conditions, the company’s smelting operations continue to face constraints due to limited tin ore supplies. Disruptions in key producing regions, such as prolonged mining suspensions in Myanmar’s Wa region and regulatory hurdles in Indonesia, have severely restricted the availability of tin concentrate. While recent permit issuances in Myanmar offer a glimmer of hope, persistent logistical bottlenecks are delaying a full operational restart, making a substantial increase in supply unlikely before 2026.

Future Outlook

The outlook for the tin market remains positive, with prices expected to climb further due to a projected supply deficit. Demand is set to be robust, driven by the expanding electronics and green energy sectors, the AI boom, strong semiconductor sales, and the increasing adoption of tin in conductive components and batteries for green technologies and electric vehicles.

Analyst View

The investment bank maintains a Neutral recommendation for the stock, with an unchanged 12-month target price of RM1.48.