Broker: UOB Kay Hian
Date of Report: 14 April 2026
Excerpt from UOB Kay Hian report.
Report Summary
- Stock: Malaysia Smelting Corporation
- Ticker: SMELT MK
- Action: HOLD (Maintained)
- Target Price: RM1.89
- Current Price: RM1.92
- Key Highlights:
- MSC is increasing mining output with a new sand-tailings recovery plant, expected to raise daily output from 11 to 14–16 tonnes starting April 2026.
- Decommissioning of the Butterworth plant will generate recurring monthly cost savings of RM1.5m–2.0m, improving overall efficiency.
- Internal ore intake will rise from 20% to 25%, reducing reliance on third-party ore for smelting operations.
- Near-term earnings are supported by higher tin prices and continued monetisation of tin intermediate reserves, but challenges in securing third-party ore persist.
- Earnings are forecast to peak in 2026, supported by higher margin intermediate reserves before normalising as reserves deplete.
- Implication: Investors should maintain HOLD as the share price is close to target price, with limited upside. The company benefits from operational improvements and cost savings, but faces ongoing supply challenges.
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