TINS posted a net loss in 1Q20 due to high inventory cost and lower ASP but we are still optimistic for the 2020F performance. We expect TINS to reach tin ore production of 58,391 tonnes, refined tin sales volume of 56,930 tonnes, and ASP of USD15,691/tonnes for 2020F. We initiate a BUY recommendation considering operational efficiency, bullish potential of global tin prices in 2H20, and the prospect of new smelter project.
Modest performance in 1Q20 because revenue and net profit slipped by 4% YoY and 20.6% YoY.
INCO posted a net profit after recorded a net loss in the same period of last year. The operational side has improved, nickel in matte production increased by 34.7%, sales volume increased by 20.5% YoY, and ASP increased by 14.6% YoY.
1Q20 result is below our expectation with a decrease in net profit by 40% YoY, which is the result of a 19% YoY decrease in revenue and an increase in forex loss by 418% YoY.
The spread of COVID-19 will reduce supply and demand for CPO, the slow replanting program, and the potential of weather with low rainfall in 2020. We estimate the prices of CPO to hover at MYR2,050/tonne-MYR2,120/tonne.
INCO’s 2020 performance remains advancing regardles the spread of corona. Nonetheless, NHKSI provides the worst-predicted scenario for INCO’s performance, if the pandemic lasts until the end of 2020.
Performance of Gold Mine Increases Significantly
Projection of Coal Prices
MEDC succeeded to gain revenues of USD1.02 billion (+10.3% YoY).
