MSM earnings turnaround is REAL.... Here is 3 reasons why I think it can go to RM1.60 which is double current share price of around 80 sen.

1. Most of their RM56m in 4Q20 is repeatable, meaning not much one off. You can check for yourself here

https://www.bursamalaysia.com/market_information/announcements/company...

https://www.bursamalaysia.com/market_information/announcements/company...

2. New management seems to be serious in turning around company. See the news below.

https://www.theedgemarkets.com/article/msm-group-ceo-sacked-after-unac...

3. This stock is worth RM1.60! RM56m one quarter means one year can do around RM224m. To be extra safe, I give 5x PE to get RM1120m.

As the Company has 703m shares, RM1120m / 703 = RM1.60...

4. Historically this stock trades at RM4 to RM5 when it made good earnings. If current management turnaround strategy works out to be good, there is strong chance for this stock to go back to RM4 to RM5.

5. Vaccine rollout is positive for MSM.

The logic is simple - more sugar is consumed indirectly nowadays when eating out... Things like cakes, teh tarik, drinks all have sugar inside. As economy recovers, more people will eat outside, leading to higher sugar consumption.

6. It looks like things are just starting to improve. 4QFY20 earnings is the first profit after 8 quarters of net loss. And the new management is just few months in the office. They already deliver good earnings. 

7. Cash level TRIPLED to RM68m. Somemore long term debts declined to RM518m from RM605m. And short term debts down to RM388m from RM439m. In short, the company is getting better in getting more cash and reducing its debt.