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MSM (5202) - Technical & Fundamental Analysis


Technical Analysis

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- There is no significant technical signal for reference.

- MSM shares price has been fall without resistance in the past 2 years.

- Reduce in shares price due to changing of the business fundamental.

- Don't try to hold a falling knife!! KIV.

Fundamental Analysis

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a) Summary

- MSM back to positive earning in Y2018 which lead significant jump in earnings growth, 210%

- Latest net cash company still negative value, -RM56M and ROE still a single digit.

- It is hard to judge MSM business performance at this moment.

b) Market Prospect Ratio

- MSM shares prices movement has been reflected a significant reduction in EPS.

- No dividend payout in the last 2 years due to negative EPS in Y2017 and net cash company in Y2018 respectively.

c) Profitability Ratios

- MSM revenue in an upward trend from Y2014 - Y2017 but there is a drop approximate 16.59% in Y2018. (Y2017: RM2,656M; Y2018; RM2,215M)

- MSM able to increase gross margin by 3.43% with better cost management,

- Markets expect MSM able to generate higher revenue in the future after completion of MSM Johor which has increased their capacity by 1M tonnes per years.

d) Efficiency Ratio

- MSM efficiency ratio doesn't have any significant change in the past 5 years due to sugar refineries is control business segment.

- Thus, MSM enjoys monopoly business modal.

e) Liquidity & Solvency Ratio

- Higher investment activities and lower revenue cum greater cost of operations, it leads deteriorate in liquidity & solvency ration performance.

- With the completion of MSM Johor, it will improve MSM performance in the long run and MSM group become one of the largest standalone sure refiners in Asia.

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