Heavy losses in a row
Masan High-Tech Materials JSC (Upcom: MSR) - a subsidiary of Masan Group Corporation (MSN) chaired by Mr. Nguyen Dang Quang - has just announced its financial situation in 2024 with many negative results, heavy losses, and decreased equity.
Nui Phao Mineral Exploitation and Processing Company Limited - a subsidiary 100% owned by Masan High-Tech Materials - also announced a similar large loss and a sharp decline in equity.
Specifically, Masan High-Tech Materials reported a loss of nearly VND1,587 billion in 2024, after a loss of nearly VND1,530 billion in 2023. Equity decreased from VND13,624 billion to VND12,163 billion.
Also according to the report, Nui Phao Mineral Exploitation and Processing Company Limited reported a loss of nearly VND 1,536 billion in 2024, after a loss of nearly VND 1,409 billion in 2023. Owner's equity decreased from VND 10,894 billion to VND 9,484 billion.
Despite the record loss, Masan High-Tech Materials Corporation’s MSR shares are at their highest level in the past 2 and a half years. MSR shares have been on a steep rise since January 24, from VND10,800/share to around VND20,000/share as of now.
MSR shares witnessed many sessions with ceiling price increases of nearly 15% such as on February 20, February 17, February 14, February 13, February 7 and February 6. In all these sessions, the shares increased to the maximum allowed range with a situation of sold out, "no sellers".
What's Behind the Big Losses, Stock Price Gains?
Despite its poor business results and Masan High-Tech Materials having to accelerate restructuring to operate effectively, with the divestment at HCStarck, the company is said to benefit from an important decision by China.
On December 18 last year, MSR announced that it had completed the transfer of 100% of the shares in HC Starck Holding (Germany) GmbH (HC Starck) to Mitsubishi Materials Corporation for $134.5 million. The deal was first announced in May 2024.
In conjunction with the sale agreement, MSR and HC Starck also entered into an offtake agreement for APT and tungsten oxide.
After completing the above transaction, Masan Group said it would record a one-time after-tax profit to reduce MSR's debt, in line with Masan Group's target debt ratio.
In fact, according to the recently released report, the debt ratios of both Masan High-Tech Materials and Nui Phao Mining and Processing Company Limited are more positive.
Specifically, for MSR, by the end of 2024, total liabilities will be only nearly VND 14,803 billion, compared to nearly VND 26,748 billion at the end of 2023. Of which, bank loans will be VND 3,787 billion, compared to nearly VND 4,700 billion at the end of 2023. Debt from bond issuance is VND 8,198 billion, compared to VND 10,280 billion.
The situation is similar for Nui Phao Mineral Exploitation and Processing Company Limited. By the end of 2024, total liabilities will be only nearly VND 14,398 billion, compared to nearly VND 26,265 billion at the end of 2023. Of which, bank loans will be VND 3,787 billion, compared to nearly VND 4,700 billion at the end of 2023. Debt from bond issuance is VND 6,698 billion, compared to VND 7,285 billion.
MSR’s stock performance over the past two months has been largely attributed to trade tensions between the Trump administration and China. After the US imposed tariffs on Chinese imports, Beijing announced in early February restrictions on exports of key minerals to the US, including tungsten.
Tungsten is an indispensable metal in many key industries such as machine and tool manufacturing, automobile manufacturing, aerospace, oil and gas, chemical industry...
China produces more than 80% of the world’s tungsten supply. China’s export curbs could cause tungsten prices to rise. This is an opportunity for Masan High-Tech Materials, which holds the Nui Phao mine, the world’s second-largest tungsten mine (outside China). The US may have to look for alternative sources, opening up opportunities for other countries like Vietnam.
According to a report by VDSC Securities Company, the price of tungsten products may increase in the short term due to the impact of China's new policy. However, the benefit for Masan High-Tech Materials may not be too great. The reason is that MSR has sold its investment in HC Starck - a company specializing in refining midstream/downstream tungsten products. These are the products that can directly benefit from the US-China trade tension, instead of the upstream tungsten ore that MSR is exploiting.
Source: https://vietnamnet.vn/buon-khoang-san-lien-tiep-lo-nghin-ty-dn-ho-masan-co-gi-de-nguoc-dong-2385149.html
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