MSM IPO – What Say You?

There have been many arguments over the IPO performance after 2 straight poor debut IPO, namely UOADEV & XOX.

Whatever the arguments are, we have successfully applied for MSM IPO today, in view of better earning & profit expected for MSM in years to come. MSM IPO priced at 10.2 times PE at RM 232M profits for Year 2010.

MSM plan for at least 50% dividend payout yearly which translated of around 16 – 17 cents per share, closed to 5% of it reference retail price at RM 3.38.

Furthermore, MSM shown improvement in its 1^st Quarter financial year ended 31 March 2011. At 5 - 10% improvement in profit, the dividend will increase to 18 – 19 cents per share, which translated to around 5.5% dividend payout ratio, in which should be better than bank saving!

Even though MSM is not expecting to grow much from the domestic sugar consumption growth, but MSM will be a stable stock from dividend point of view.

Nevertheless, MSM is ambitious in Sugar Refining Business since it’s also plan for takeovers, strategic acquisitions & investment in the region, particularly in South-East Asia.

To date, the company has successfully penetrated niche markets overseas, such as Pakistan, for sugar used in pharmaceuticals.