Hi,

Will this effect their hospital concession in Cheras as well (which is being held by the same entity, Zecon Medicare)?

And what will happen to the 49% sales of Zecon Medicare to Sarawak state for RM155mil? In the news it seems that even the sarawak state was agreeable for the termination of Zecon Medicare as Petra Jaya Hospital contractor. Don't understand why you would want to do that if you plan to buy the company, right?

Thanks.

Hi Cherrie,

I think one thing that people might forget to input in their assessment is the long awaited splash deal. Saw that KPS, another shareholder of splash expected to be trading higher today.

Thx.

Hi Ks5S,

Don't think that the deal will be abandoned just because of a new government. The deal between UMW and MBMR has no political motives at all (at least in my view). The main reason for the acquisition is to have a bigger exposure in Perodua which will help grow UMW's bottom line in the future. Most analyst are actually bullish of this deal as it is seen as value accretive to UMW.

Daim has already met with Dato' Rahman (CEO of PNB) yesterday and it seems that the guy will stay on heading PNB in the near future.

http://www.theedgemarkets.com/article/daim-holds-maiden-meeting-heads-six-glics-today

Either way, Perodua sales is expected to grow this year which will be a boon for MBMR (lets see the 1st quarter result due end of this month). In addition, the potential reintroduction of fuel subsidy for cars under 1300cc might help push future sales of Myvi as more people would want to own this type of cars in order to gain benefit from the subsidies.

Feel free to comment.

Thanks.

Hi Guys,

Going through the Pakatan Harapan Manifesto, I think people are jumping to conclusion too fast. As indicated in page 18 of the Buku Harapan, the process of toll abolishment will be done in a step by step process. What they will do in the first 100 days is actually reviewing first all the toll concessions contracts (there is 31 of those if i am not mistaken). Please don't expect the government to start abolishing tolls prior to coming up with a fair compensation to the concession owners.

Most of the highways are mainly been funded via the bond markets. Nationalising the highway via force acquisition will have a ripple effects on the malaysia bond markets which will make it difficult for the government or the private sectors to raise funds in the future. Future investors would want a higher interest rates in order to compensate for the risk of contract cancellation or risk of payment.

Even Tun Mahathir himself were actually against the abolishtment of tolls. refer to his interview with Singapore Sunday Times last March just after the presentation of the Buku Harapan.

https://www.thestar.com.my/news/nation/2018/03/26/dr-m-pakatans-chances-5050-expremier-feels-opposition-cant-deliver-some-of-its-promises/

Also please be aware that EPF (which represent the rakyat's retirement savings) have 40% interest in Konsortium Leburaya Utara Timur Sdn Bhd, the holding company of the Duke Highway concession, which they had paid RM1.14bil. Don't see how pakatan can pull this off without at least paying the same valuation as what EPF paid (RM2.85bil which is actually around RM0.80/ share for Ekovest 60%)

My take is for all to take a step back and see first how all of this will develop.

Feel free to comment.

Thanks

Hi Guys,

With the new govt promise of a higher payment of oil royalty to both sabah and sarawak, I assume there will be more development and higher spending power for both the state government and the East Malaysia people.

In the long run i would assume there will be more trades in sabah and sarawak. The import of products to satisfy the expected higher spending by the East Malaysia people or to bring in raw materials for future infrastructure development project ( based on the manifesto, it seems the Pan Borneo highway would be one of the priority in improving the connectivity between rural and urban areas in East Malaysia). The growth in trades is expected to be a boon for shipping companies in sabah and sarawak.

The main port in sarawak is the Bintulu port of which there are currently only 3 major container cargo players there, MTT Shipping (unit of Taiwan based Evergreen Marine Corp), Shin Yang Shipping Corp Berhad and Harbour Link Berhad.

Shin Yang , Northport and Harbour Link has also team up to form the East Malaysia Network which will help achieves economies of scale through sharing of resources (vessels, terminal arrangement and networks). This i assume will reduce the risk of these to companies price cutting each others. Hence setting at least a floor price for the charter rates which would protect both companies profits.

Good growth for Harbour Link going forward. Appreciate your views on this.

Thanks.

Hi Guys,

Pakatan promised to introduce fuel subsidies for cars below 1300cc (refer to page 30 under "Janji 7: Menyediakan subsidi minyak bersasar" of Buku Harapan ). I assume this will help increase sales for Perodua's Myvi as more people at least those in the below and mid income bracket would prefer to buy these types of car in order to get the fuel subsidies. This in turn will provide better growth for MBMR.

What do you guys think of this? Thanks.

Buku harapan link: https://www.keadilanrakyat.org/index.php/bukuharapan/

Hi yongch,

That is because there is no liquidity in the stock. The spread between the buy and sell order is a bit wide.

Hopefully the gap will reduce once the market becomes more interested in the stock. I think 2018 will be the turnaround year for MBMR mainly driven by the results coming from Perodua.

Perodua new Myvi has exceed expectation both in the sales numbers but more importantly in the sales of their premium version of Myvi which will provide better margins (profit to Perodua).

The strengthening of ringgit vs USD will also help reduce the input cost for Perodua and also for the manufacturing arm of MBMR.

In addition, the impairment of goodwill (RM145.6m) relating to Hirotako Holdings acquisition (back in 2012), the impairment of investment in Autolive Hirotako (RM52.9m) and impairment of PPE of the alloy wheel division (RM61.7m) will reduce the annual depreciation and amortization charge of the group which itself will help increase the profit.

Bare in mind that the 22.6% in Perodua itself is already valued at around RM1.1b (or RM2.80 per share) which is higher than MBMR current market cap of only RM887m. This also means that the other business is practically free at the moment.

A steel and aluminium tariff by the US will actually help MBMR (& Perodua) given that it will actually flood the global market with access steel and aluminium hence reduce their price. Which means cheaper raw material for our domestic automotive companies.

Feel free to comment if anyone don't agree on the assessment. Would like to know also other people views on the company prospect.

Thanks

Going through their 2016 annual report and notice that Perodua has no debt at all in their balance sheet. The value of mbmr stake in perodua itself is higher than its market cap.

Wondering why the other big automotive players are not looking to acquire the company given it is steeply undervalue? Can easily help them in providing the profit growth for the future..

Expect a better performance starting 4Q of 2017.

https://www.thestar.com.my/business/business-news/2017/12/16/mbm-gaining-traction/