MSR poised to tap 28 million tonnes of reserves as tungsten price cycle turns favorable

Masan High-Tech Materials (UpCOM: MSR) is entering a pivotal turning point in 2026, aiming to benefit from a favorable tungsten price cycle and strengthened structural fundamentals. The company plans to continue mobilising and mining the 28 million-tonne reserve approved earlier at Nui Phao, one of the world’s largest tungsten mines outside China. This additional supply is expected to support production expansion in the coming years, with meaningful contributions anticipated from the second half of 2026. The contractor has also been licensed to use industrial explosives to ensure continuous mining activity.

Breakthrough profit and a clearer deleveraging path

The first quarter of 2026 marked a turning point for MSR, with net profit after tax before minority interests of VND 537 billion, the highest quarterly level on record and a reversal from the same period last year. The improvement is supported by favorable APT price movements and improved operating efficiency.

Management says the financial outlook is becoming more predictable under defined price scenarios. In a cautious scenario where APT prices average around USD 1,500 per mtu, MSR could still generate substantial profits and gradually reduce net debt over the coming years.

Under this scenario, MSR expects net debt to EBITDA to fall from about 3.5x to 1.7x in 2026, moving closer to a net cash position in 2027–2028 (net cash meaning cash exceeding gross debt). The trajectory is also supported by Masan’s ownership of more than 90% of MSR’s economic interests.

In a more favorable scenario, if APT prices remain around USD 2,000 per mtu, management expects the process to accelerate. MSR could potentially reach a net cash position even within 2027, with stronger profit growth and potential dividend payments. In either case, the deleveraging trajectory is described as foreseeable and not solely dependent on short-term commodity price movements.

Cash-flow cycle: operating structure and reserve deployment

MSR’s improvement is attributed not only to price dynamics but also to a mature operating structure built over previous years. The company operates an integrated value chain from mining to downstream processing, which supports higher-value products and tighter cost control compared with typical mining models.

In an environment of rising APT, mining profits tend to increase faster than revenue due to fixed costs. As the upcycle extends, this can help cash flow improve faster than expected.

2026 targets and balance-sheet focus

Under Masan’s 2026 plan, MSR targets after-tax profit before minority interests of around VND 1,700–2,500 billion, based on a conservative APT price of USD 1,164–1,246 per mtu. If APT prices remain elevated, the company could exceed the plan by expanding profits and cash flow.

On that basis, MSR is prioritizing strengthening its balance sheet. The focus includes debt reduction, trimming interest costs, and improving overall financial efficiency to support cash accumulation and a healthier financial position in the coming years.

Implications for shareholder value in the next cycle

As a commodities company shifts toward generating cash and delivering value to shareholders, markets often re-rate valuations. For MSR, this transition is expected to become clearer over time.

2026 is expected to deliver strong earnings growth supported by the favorable price cycle and improved internal fundamentals. In 2027, MSR could accelerate deleveraging, potentially reaching a debt-free state in the favorable scenario. In 2027–2028, MSR aims to reach a net cash position, which would enable dividend payments and signal a shift toward direct value creation for shareholders.

As profits, cash flow, and the balance sheet improve, MSR is positioning itself as a cash-generating platform that could be re-valued in the next cycle, supporting long-term value for shareholders.