MBM Resources: Fair value RM4.10 Market Perform (Maintained)
Tan Chong: Fair value RM4.50 Market Perform (Maintained)
UMW: Fair value RM10.90 Outperform (Maintained)
APM: Fair value RM4.90 Market Perform (Maintained)
DRB-HICOM: Fair value RM3.35 Outperform (Maintained)

• Malaysian Automotive Association (MAA) reported total industry volumes (TIV) data for Jul that was incomplete as Proton did not submit their Jul sales figures.
• Excluding Proton, Jul TIV amounted to 46,637 units. Assuming that Proton sales in Jul were smiliar to that achieved in Jun, then the proforma Jul TIV would have scaled a new monthly record of 60,132 units, up 6.2% mom and 19.7% yoy.
• The positive start to 2H12 is within our expectations, helped by the normalisation of component supplies, attractive new model launches, the market’s adaptation to the revised lending guidelines and positive consumer sentiment.
• Perodua also had a solid month with Jul sales reaching 17,009 units (+3.5% mom, +3.9% yoy). We believe forecast Perodua sales of 188,000 units for 2012 is achievable.
• Sales going forward will be lifted by the normalisation of component supplies and continued new model launches. The new Honda Civic introduced last month has reportedly received bookings of over 3,000 units. Although some seasonal weakness is expected in Aug, our 2012 TIV forecast of 612,000 units remains intact.
• Maintain Neutral call. Our top picks are DRB-HICOM and UMW.

Source: RHB Research - 17 August 2012