Journey to Wealth
MBM Resources - 3Q12 results below expectations
Period 3QFY12/9MFY12
Actual vs. Expectations Below ours and the consensus' estimates.
9M12 net profit of RM105.9m made up 65% and 68% of ours and the consensus' FY12 earnings respectively.
Dividends No dividend was declared.
Key Result Highlights 9M12 net profit increased by ~12% YoY to RM150m due to better sales and a better performance from its manufacturing division. At the operating level, the manufacturing profit jumped by by 360% due to the impact from the consolidation of Hirotako's earnings coupled with the increases in demand and production.
YoY, 3Q12 net profit of RM35.5m grew marginally at 0.4% due to a higher interests cost incurred by the holding company from the drawdown of short-term loans (+54%). The additional loans were mainly raised to finance the acquisition of Hirotako.
QoQ, the revenue slid by ~5% due to a slower sale, which was in line with the drop in the TIV during the quarter (-3.4%). However, the net profit rose by 20% due to higher contributions from its associates and a better utilisation rate at the manufacturing division.
Outlook We expect the growth to be slightly better in 4Q12 due to the recent launches of a few new models. There is no change to our FY12 TIV growth assumption of 2.4% at this juncture.
Change to Forecasts We have trimmed our FY12-FY3E by 7% and 13% respectively as we have factored in a higher operating and financial cost to align it with our latest outlook and its latest results to date.
Rating Maintaining MARKET PERFORM
Due to the less attractive upside (+8% from here) of the stock after our revision in the target price ('TP'), we are maintaining our Market Perform recommendation.
Besides, we also believe that the auto sector is likely to consolidate in the near term due to the absence of catalytic news i.e. NAP revision, etc.
Valuation We have lowered our TP from RM4.24 to RM3.68 on our revised lower forecasts, pegging it at an unchanged FY13E 9x PER.
Risks A decline in consumer sentiment and a stricter HP financing.
Source: Kenanga
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CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
raviy2k13
Incompetent analyst...go back to school!! Growth outpacing market growth you fool.
2012-11-09 11:32