Posted by cricketlast > 2018-11-17 05:51 | Report Abuse

Maybank had come out with a new report for UMW on the 12th November. In the report, it values UMW 38% holdings in Perodua at RM2,598mil or RM6,837mil for the entire Perodua.

Using the same valuation, the 22.6% interest of Perodua held by MBMR is valued at RM1,545mil or RM3.95 per share.

Posted by BN_better > 2018-11-17 05:55 | Report Abuse

Why MBM still drop? When is lowest?

Posted by BN_better > 2018-11-17 05:57 | Report Abuse

QR 22nd Nov?

Posted by shareinvestor88 > 2018-11-17 17:19 | Report Abuse

Sell Sell TP 1

Posted by cricketlast > 2018-11-19 05:45 | Report Abuse

Hi BN_better,

The drop could be due to the lapse of offer by UMW to take MBMR private on 30th Oct. Some people might be speculating that the offer would go through and were disappointed when it did not happen.

However, if you look at the fundamentals of the company, it still provide the best exposure to the automotive industry via its 22.6% holdings of Perodua which is undoubtedly the market leader in Malaysia.

The current valuation of 6.0x PE and 5.7x 2019 PATAMI is the lowest for the past 5 years. On average the stock has always been trading at a valuation of 10.0x PE. Automotive industry average is higher at 15.0x PE.

22nd Nov was the date when the 3Q17 result was reported last year. PATAMI for 3Q17 was only RM7.3 mil. Expect MBMR to record a higher 3Q18 result.

Posted by commonsense > 2018-11-21 06:41 | Report Abuse

Very undervalue stock especially for a stock with direct exposure to Perodua.

PE multiple below 6.0x.
PB at only 0.5x
Net gearing of only 2.1%.
Positive free cash flow and expected to grow further in 2019.
Expected solid growth into 2019 from high demand of New Myvi, new SUV and turnaround of alloy wheel business.

Will wait for the 3Q18 result.

Posted by shareinvestor88 > 2018-11-22 08:51 | Report Abuse

downl trend sell TP 1.20 - 1.50

Posted by shareinvestor88 > 2018-11-22 18:49 | Report Abuse

Sell tp 1.20

Posted by lazycat > 2018-11-22 18:53 | Report Abuse

this is a turnaround stock, it keep continue pouring out good results, current valuation dirt low , past few months trading volume also low, tml volume and price might explode , limit up 1.87 x 1.29 = RM 2.41 :P

Posted by Alfred Boon Huat > 2018-11-22 19:45 | Report Abuse

Good result

Posted by cricketlast > 2018-11-22 23:06 | Report Abuse

Highlights of the MBMR 3Q18 results:

Perodua managed to provide good result even though it was faced with a production issue of the New Myvi. Production has normalised since early October. Expect better performance from Perodua for 4Q18.

Lower losses for the auto parts division due to better production efficiency of alloy wheel division. Alloy wheel division expected to break even by 2019.

Stronger balance sheet with cash balance of RM223mil. As of Sept 2018, the company is in a net cash position.

Better than expected PATAMI recorded mainly from the excellent performance of associate company Perodua. Revised upward PATAMI target of 2018 to RM145mil from RM120mil.

At current price, the valuation is only at 5x PE the lowest in the auto industry even though MBMR has a direct exposure to the market leader Perodua. For the 5 years average, MBMR has always traded at a range of 10x PE. The automotive industry is currently trading at an average of 15x PE.

Posted by PotentialGhost > 2018-11-23 00:39 | Report Abuse

Useless that price would not up , because we are in boleh land . We live together with monyet .

Posted by chamlo > 2018-11-23 05:32 | Report Abuse

4.5 sen dividend 1 year is issue to EPF?

Posted by megatti_maf > 2018-11-23 09:20 | Report Abuse

Wow maybank TP rm4.18

Posted by commonsense > 2018-11-23 10:27 | Report Abuse

Results are above expectation.

4Q results should be better supported by the 22,000 new myvi orders that has yet to be delivered as of september. I am also anticipating that most of the 47,273 cars sold in october will actually Perodua and Proton (since they are the only company that is still absorbing the SST). The breakdown of sales by brand should be available by next week.

Those interested in investing into this company should focus mainly on Perodua performance as that is actually the determinant of the profit to MBMR (the other businesses such as auto parts manufacturing and car dealership actually does not contribute much to the bottom line).

Current valuation is the cheapest for the automotive industry (around 5x PE). Anyway, it is a lot cheaper than what UMW is currently trading (UMW holds 38% or Perodua, which provides investors another alternative to get exposure to Perodua).

Posted by Alfred Boon Huat > 2018-11-23 14:56 | Report Abuse

Sold at 1.930, stupid...keep dropping

Posted by Alfred Boon Huat > 2018-11-23 15:20 | Report Abuse

Sold at 1.960, keep dropping, no eye see.
.

Posted by dompeilee > 2018-11-23 17:11 | Report Abuse

I regretted not re-entering after the results released last evening...now I don't regret selling @ 2.48-2.50 in March on the premise that UMW could not afford to takeover MBMR :) :-

dompeilee Bought some MBMR @ 2.05...Gonna b sizzling hot soon !:

16/10/2017 16:04

.....SOLD 1/2 @ 2.48-2.50!!! :D
12/03/2018 09:18

Posted by Chenmr123 > 2018-11-24 11:40 | Report Abuse

Good movement shown, market may take a correction once opened again. Be careful, you can reenter but after wait for first few hours.
For live market update & picks whp (601157940369) to get proper analysis on fundamentals & latest reports

Posted by James Ng > 2018-11-26 09:01 | Report Abuse

https://klse.i3investor.com/blogs/general/183676.jsp
[转贴] [MBM RESOURCES BHD：受益于2018年8月31日结束的商品及服务税的税收假期] - James的股票投资James Share Investing

Posted by commonsense > 2018-11-27 10:46 | Report Abuse

I can't highlight enough that this counter is the most attractive counter in Bursa in terms of its low valuation and also the profit growth that it offers. The company holds a 22.6% interest in Perodua. Another listed company with exposure to Perodua is UMW.

At a target PATAMI of RM145mil in FY 18, PE valuation is still only 5.3x PE.

The profit is also expected to grow in FY19 backed by the still high demand of the new Myvi (22k firm orders yet to be delivered as of Sept 18) and also the new SUV which will provide a new range of customer based. This is because the SUV price of RM70k to RM80k does not coincide with any other Perodua products (currently the higher price vehicle for Perodua is Alza at RM63k). So those that are interested in the new SUV will most probably be new segment of customers. Production for the SUV has started in October.

Other positive catalyst for the MBMR would be:

The breakeven (or even profit) of alloy wheel manufacturing division (expected to sign an export agreement with Citic Dicastal by this quarter). New Myvi and New SUV are both using MBMR's alloy wheel.

Higher demand orders from Proton for the auto component division especially for the new X70 which is expected to be manufacture locally next year. Management is still in negotiation with Proton's representative.

For FY 19, I am targeting a PATAMI of RM160mil. Which at the current price only values MBMR at 4.8x forward PE.

PB is only 0.5x BV with cash balance of RM 222.5mil.

Free cash flow is positive and expected to increase further.

Posted by commonsense > 2018-11-29 10:19 | Report Abuse

Perodua car sales in October this year was 19,528 cars which is a 106% increment compared to September sales (which had production issue for Myvi).

The sales number is also higher by 18.4% compared to Oct 2017 sales of 16,491 cars. If the same trend continues for Nov and Dec, we should expect that MBMR to post a PATAMI of above RM40mil for 4Q18. This will bring the profit to around RM145mil for 2018. At current valuation that is only 5.2x PE.

The company is also expected to finalised on the export deal with Citic Dicastal soon which will increased the production rate of the alloy wheel division.

Posted by lazycat > 2018-12-03 17:08 | Report Abuse

how come the stock price won't go up given the latest 3 quarter good results.. sigh

Posted by lazycat > 2018-12-05 16:14 | Report Abuse

commonsense tenkiu for promote mbmr..

Posted by Hafid > 2018-12-05 19:04 | Report Abuse

Still small gain only. Hopefully back to 2.60 level at least

Posted by lazycat > 2018-12-06 10:01 | Report Abuse

hi everyone , want go for a ride? :p

Posted by megatti_maf > 2018-12-06 12:14 | Report Abuse

awesome counter. May more and more retail and institutional investors get notice of this cheap valuation growth company.

Posted by KiasiPu > 2018-12-06 14:52 | Report Abuse

UMW trigger the buying MBMR again?

Posted by yongch > 2018-12-06 15:44 | Report Abuse

Yes...good news! Tp2.80!!!!now both party restarts negotiating....

Posted by azharhassan78 > 2018-12-06 21:08 | Report Abuse

game started.

Posted by KiasiPu > 2018-12-07 10:53 | Report Abuse

yongch, where is the news?

Posted by pharker > 2018-12-07 12:15 | Report Abuse

Dun simply spread false rumours....1st say price will go down tp 1.50 so ppl sell u buy cheap..then dah beli spread false rumours say UMW start renegotiating...tak elok mcm ni....we are here to help each other..not to send each other to holland...alhamdulillah

Posted by commonsense > 2018-12-07 12:51 | Report Abuse

Hi Kiasipu,

Rather than focusing on speculative news, better we look at the company's fundamental. Given the current market condition, most of the companies in Bursa had actually posted profit that was below the expectation of investors (and most actually posted losses rather than profit). Based on CIMB study's only 11% of listed company posted above expectation results.

MBMR is one of those companies. Just to recap (apologise for repeating), the company is currently the most under value company in the Auto segment even though it has a direct exposure to the market leader which is Perodua. Exposure is via the 22.6% interest in Perodua.

Based on a target PATAMI of RM145mil for FY18 (9 months Patami is already RM105.5mil), the company is currently only valued at 5.9x PE and a PB of only 0.6x. The industry average (you have to take out MBMR off course) is around 15x PE.

4Q18 will be higher than 3Q18 and 4Q17 result. Just look at the Perodua car sold in October (19,528 cars vs 16,491 on Oct 17). And remember as at end of Sept, there were still more than 22,000 firm orders of new myvi yet to be deliver. Management is actually expediting this in order to clear them before end of 1Q19 (which also mean 1Q19 most probably be higher than 1Q18).

Now if you roll the profit into FY19, which i'm targeting something around RM160mil PATAMI, the valuation would fall further to only 5.3x PE. The growth will mainly comes from still high demand of new myvi, launch of the entry level Perodua SUV in 1Q19 and also the turnaround of the alloy wheel division driven by higher export market (in collaboration with Citic Dicastal, China largest alloy wheel manufacturer).

In terms of balance sheet, the company is currently at a net cash position and free cash flow are only expected to increase further (management has indicated lower capex spending going forward). The debts are mostly for trading purposes which means it is backed by the inventories and receivables.

Hope that would provide you more confidence in the company's fundamental (rather than focusing on speculative news).

Good luck.

Posted by pharker > 2018-12-07 14:35 | Report Abuse

A very good analysis..commonsense

Thank you

Posted by shareinvestor88 > 2018-12-08 11:16 | Report Abuse

SELL TP 1

Posted by commonsense > 2018-12-09 07:57 | Report Abuse

Hi ciaksai,

Here is my views on some of your concerns:

1) Tax holiday period has ended. Car sales will go down. Results will start to go down.

Perodua car sales has actually increased in October this year compared to 2017 (19,528 cars vs 16,491 on Oct 17). In 3Q18 MBMR recorded a PATAMI of RM38.1 mil which is the highest quarter since at least FY2015. This was achieved even when Perodua faces with a production disruption of the new myvi in August and September (sales of myvi was low for 3Q18 at only 11,000 vs 1Q & 2Q average of 23,000 units). Production has normalised since early October. 4Q18 is expected to be higher vs 3Q18 due to management commitment to deliver and clear the 22,000 back log of new myvi that was effected by the disruption in Aug and Sept. In addition, given the normalation of production, average Perodua car sales in 4Q is expected to be higher than 3Q (October numbers has proven that). Growth in FY19 will be driven by still high demand of new Myvi and new Perodua SUV.

2) 3rd national car will effect MBMR business outlook.

Given that MBMR is actually one of the biggest auto component manufacturer (if not the biggest), MBMR could actually benefit from the increase of local car production in Malaysia. The company is the market leader in the manufacturing of steel and alloy wheels, auto safety products (seat belts, air bags and steering wheels) and noise, vibration & harness products (insulator, dampening sheets, headliners etc).

However, i have my doubts on the 3rd national car project. I think the only person that really wanted the project is our PM, Tun M. The others are just being accommodative to his request. Their target is to roll out production by 2021. From the conception of a car to production will actually need a lot of capital and time. Tun M is expected to step down and pave way to Dato Seri Anwar in 2020. I just don't see Anwar wanting another Proton in his first tenure as the new PM.

I think it would be wise to wait and see the development of the said project before we include it in any investment analysis. We might be jumping the gun on this.

3) New car is not necessity. Buy second hand or buy motor cycles.

I just think most Malaysian just prefer buying new products rather than used one. Until that mindset changes i would still think that people would prefer new cars vs second hand.

I have seldom heard (actually almost never) of people selling their cars to convert to motorcycles. Most of the time its the other way around.

But i get your argument that given the current economic condition car sales might get effected (in the case of MBMR case, we are worried that Perodua sales will go down since its the main profit contributor to the group). I have actually a thesis of my own on this. I believe in a difficult economic condition, Perodua sales might actually do better vs other brands. The reason is that instead of people ditching their cars for motorcycles (as per what you suggested), people would actually opt to a cheaper brand of a car (as they will still prefer cars as a mode of transportation). So most of them who are trying to cut cost will actually opt to buy Perodua rather than foreign made car for example. During the most recent financial meltdown of 2007 to 2009, sales and profit of Mcdonalds actually went up in the US. The reason is that people decided to stop going to expensive restaurant and opt to eat out at Mcdonald instead because it is way cheaper.

With the new petrol subsidy mechanism to be introduce in 1Q19, Perodua will actually be one of the main beneficiary. Even most of Proton cars are not entitle to the subsidy as most of them has an engine size of 1,600 cc. Subsidies will only be given to certain car models that have engine size smaller than 1,500cc.

4) Unlimited train and bus passes will reduce future car sales.

I have my doubts on this mainly given the network coverage of our transportation system. Unless u are already living at the center of KL where the network and availability of public transport are better, then i think you will still need a car. For Perodua customers in particular, i think most of them actually lives outside of the city center.

Given the government objective to reduce expenses, i dont think our public transportation system will improve anytime soon. You can refer to the government decision to delay or put on hold some of the projects ( LRT3, MRT, HSR etc).

Hope these can allay some of the concerns that you have.

Regards.

Posted by shareinvestor88 > 2018-12-09 21:02 | Report Abuse

SELL TP 1

Posted by sell > 2018-12-09 22:12 | Report Abuse

Q4 is seasonal weak qtr. Q4 2017 MBM even suffer loss. Better take profit.
https://klse.i3investor.com/servlets/stk/fin/5983.jsp

Posted by shareinvestor88 > 2018-12-11 10:40 | Report Abuse

Sell tp 1

Posted by sell > 2018-12-12 02:34 | Report Abuse

EMPLOYEES PROVIDENT FUND BOARD (a substantial shareholder) disposed 500,700 shares on 06-Dec-2018.

Posted by sell > 2018-12-12 02:34 | Report Abuse

Even EPF run. Below RM 2 likely agsin.

Posted by commonsense > 2018-12-12 07:15 | Report Abuse

Hi Sell,

Previously MBMR posted lower 4Q results is not due to weaker operation performance. Actually, in general core profit are mostly higher during the quarter when compared to others. The main reason for the lower performance in 4Q previously was due to management decision to perform impairment or writeoff exercise of its investment at the end of the year (RM20mil in FY15, RM34mil in FY16 and RM245mil in FY17). Most of these impairment/writeoff are for the company's investment in Hirotako (safety equipment division) and its alloy wheel manufacturing business. If you were to exclude the impairment, PAT would have mostly been higher in 4Q compared to 1, 2 or 3Q.

In 4Q17, management had decided to fully impair all of its investment in Hirotako and the alloy wheel businesses which is why the impairment amount for last year was so high at RM245mil. Management has also indicated that there would be no more impairment plan for FY19. In addition to that, October 2018 sales was 18.4% higher compared to last year which is why i am confident that 4Q18 result would be better than 4Q17 and 3Q18. So you will see a growth in profit for QoQ and YoY.

I also think that investors should invest based on the fundamental of a company instead of following what other investors are doing. If you were to based your investment decisions on what EPF sells or buys then you might be a bit confuse on their decision to buy and sell UMW share on the same day for example. Or their decision to increase exposure in Armada in Nov (at price of around rm0.40) to only dispose off it as early as Dec (at price below RM0.20). It would be better for investors to focus on the fundamentals of a company rather than focusing too much on what other people are doing. Those that decides to follow Tabung Haji decisions might not be too happy now. You can follow but need to do your own analysis of the company first.

EPF decision to buy and sell on the same day:
http://www.bursamalaysia.com/market/listed-companies/company-announcements/5999581

EPF Armada movement:
https://klse.i3investor.com/servlets/stk/annchsh/5210.jsp

On your target price of RM1, it would mean that you are valuing MBMR at a mere 2.7x PE and 0.3x BV. I don't think it's logical to value a company with presence in Perodua at a very low multiple given the industry average of 15x PE.

Based on your other comments in i3, i think you are actually a bit pessimistic on investing in equity in particular in Bursa at the moment. Out of curiosity, where do you think would be the best place for investors to put their money into at the current market condition?

Regards.

Posted by antoniomc27 > 2018-12-12 17:45 | Report Abuse

commonsense, thanks for your thoughful analysis day after day vs. those just spreading bearish sentiment to get some trading profits.

Posted by megatti_maf > 2018-12-14 11:12 | Report Abuse

Affin Hwang raises target price for MBM Resources to RM3.70

TheEdge Fri, Dec 14, 2018 - 2 hours ago

KUALA LUMPUR (Dec 14): Affin Hwang Capital Research has maintained “ Buy” on MBM Resources Bhd at RM2.12 with a higher target price of RM3.70 (from RM3.27) and said moving on from the failed takeover attempt by UMW Holdings, MBM Resources (MBM) will focus on: (i) reducing losses from its alloy wheel business and (ii) improving its financial position.

In a note today, the research house said in view of Perodua’s strong product line-up and positive consumer sentiment, it expects Perodua to deliver robust sales in 2019, thereby driving MBM’s associates’ earnings growth.

“We raise our EPS forecast by 14% for 2019-20E, and maintain our Buy with a higher target price of RM3.70 (from RM3.27).

“At 6x 2019E PER, MBM’s valuation is compelling,” it said.

http://www.theedgemarkets.com/article/affin-hwang-raises-target-price-mbm-resources-rm370
.......................

Posted by EPF_sell > 2018-12-14 11:43 | Report Abuse

Affin also give Armada TP 55 sen what happen now?

Posted by EPF_sell > 2018-12-14 11:43 | Report Abuse

13-Dec-2018 Insider EMPLOYEES PROVIDENT FUND BOARD (a substantial shareholder) disposed 512,800 shares on 10-Dec-2018.
https://klse.i3investor.com/servlets/forum/800001115.jsp

Posted by EPF_sell > 2018-12-14 11:44 | Report Abuse

i3 forumers chase let EPF sell more.

Posted by thinINVEST > 2018-12-15 08:49 | Report Abuse

@commonsense is bound to make loss in his MBMR investment. because the good sales during tax holiday just wont repeat again. remember the news saying sales during tax holiday in 3 months is actually the sales in a year previously. during tax holiday the perodua cars are cheaper 10-20k . its a huge discount. its not like clothes and other things where tax holiday only reduce a few ringgit. keep on living in ur dream that car sales will increase?? well, i can only say, i wish ur dream come true

Posted by thinINVEST > 2018-12-15 08:50 | Report Abuse

if @commonsense go to debate competition, he can actually be champion, because of his debating skills.

Posted by signalmw > 2018-12-15 09:31 | Report Abuse

受到中國與歐元區經濟表現不如預期的影響，加劇市場對全球經濟增長的疑慮，拖累美國股市周五（14日）盤中重挫，美股3大指數全面下滑，道瓊工業指數更重挫496點，收在5月以來最低點。