Aminvestment Bank Research: National Economic Recovery Plan to bode well for auto sector.
KUALA LUMPUR (June 6): AmInvestment Bank Research has upgraded the auto sector to "overweight" (from "neutral") and said the cut in sales tax for motor vehicles sales announced in the government’s National Economic Recovery Plan (Penjana) will a boost for the sector.
As part of its sector upgrade, AmInvestment Bank Research upgraded its fair value (FV) on MBM Resources Bhd to RM4.62 per share, from RM3.59 per share, while maintaining its “buy” call. It increased its financial year ending Dec 31, 2020 (FY20) earnings forecast by 15% to factor in higher Perodua sales.
Meanwhile, DRB-Hicom Bhd’s FV has been upgraded to RM2.49, from RM1.87(with its “buy” call maintained), with its earnings forecast for FY20 raised by 7% to reflect better Proton and Honda sales.
While the “hold” call on UMW Holdings Bhd is maintained, the counter’s FV is up to RM2.56, from RM1.74 per share. Its FY20 net profit forecast is up by 27% after accounting for higher Toyota and Perodua sales volumes.
In malaysia, public transport is still not good enough to get you everywhere. Also, ppl are afraid of the virus, so chances are that those who can afford will take this opportunity to get a car.
KUALA LUMPUR (July 1): Perusahaan Otomobil Kedua Sdn Bhd’s (Perodua) June car sales jumped to 21,250 units — its highest monthly figure so far this year and an increase of 169.5% over May’s sales of 7,886 units.
The sharp rise followed the sales tax exemption announced by the government on June 5, said Perodua president and chief executive officer Datuk Zainal Abidin Ahmad.
He said the tax exemption, aimed at boosting car sales amid the Covid-19 crisis, has provided many benefits for consumers including reduced vehicle prices of up to 6% for Perodua cars.
“The sizeable volume increase we’ve had as a result of that, allows us to help the supplier and dealer ecosystem in this time of need — we purchased nearly RM500 million worth of local components in June alone,” he said in a statement today.
“Our operations are now at full capacity and maximum overtime. We are working very hard to ensure our customers receive their cars as quickly as possible, with no compromise on safety and quality,” he added.
Perodua sold 8,601 cars in March before the Movement Control Order (MCO) came into effect on March 18. This resulted in the temporary suspension of the company’s operations nationwide for two months. Perodua officially resumed operations on May 19, the carmaker said.
Year-to-date, Perodua has sold some 74,000 cars.
“We are immensely grateful to be able to bounce back with such energy in just under two months since we restarted operations nationwide. Our outlook is positive and we hope this momentum will continue and help the industry grow,” Zainal said.
“We reiterate our commitment to the government, as Malaysia’s biggest carmaker by volume, to help the industry and ecosystem wherever we can including sustaining employment, so that we can all get through this difficult time,” he added.
PE: 6.43 Profit Margin: >10% Debt to cash ratio: 0.13 (almost net cash position) current ratio: 3.89 (current asset triple than current liability) earning yield : 15% ROE% = 11% DPS ; 22 cents Dividend yield: 6.75% (60% dividend policy) NTA : 4.47
Point to note:- 1. Strong cash flow (almost net cash), which is crucial during MCO period when most of the industries are hitting bad during this period. 2. With such a low PE, high profitability (>10% profit margin, 15% earning yield and 11% ROE), its worth to look at before further shooting 3. dividend policy of 60% pay out with about 6.75% return/year is much higher than FD (currently is only at about 2%) 4. Low interest rate and sales tax exemption to boost the sales from June 2020 onwards, this can be seen from the June's sales figure of Perodua (21,250 unit), which is exceeded average monthly sales figures last year (about 20,000 units) 5. TA chart is showing up trend since March 2020
Middle term Target Price: 4.00 Long Term Target Price: 5.00
Its hard to find a company with so good fundamental, and good prospect on better recovery in 2h 2020 due to benefit from PENJANA + low interest rate. From what we can see, myvi is a very strong model which we can see everywhere on the road and economical used vehicle which suit to local market, at any point in time.
I think its time to collect more before it shooting further.
KUALA LUMPUR (July 2): MIDF Research has maintained its positive rating on the Malaysian automotive sector and said the sector is set to see an inflection point from 3Q20 onwards from a strong combination of tax-holiday-induced demand, robust consumer liquidity and a low interest rate environment.
In a note today, MIDF analyst Hafriz Hezry said the research house’s top sector picks are Bermaz Auto Bhd (BAuto) and UMW Holdings Bhd.
Hafriz noted Perusahaan Otomobil Kedua Sdn Bhd (Perodua) registered a strong 33% year-on-year (y-o-y) growth in June total industry volume (TIV) and almost tripled sequentially, marking an important inflection point in volume trends.
He said car prices have generally been reduced by 2% to 7% (3% to 6% for Perodua) given savings from the sales tax exemption incentive.
As a bellwether of the auto industry, this should signal the trend for sector-wide TIV to be announced later this month, Hafriz added.
Perodua president and chief executive officer Datuk Zainal Abidin Ahmad (pic) said Perodua has the capacity to be a possible contract manufacturer for the project
RAWANG: Malaysia’s second national carmaker Perusahaan Otomobil Kedua Sdn Bhd (Perodua) is in talks with the government to participate in the realisation of the third national car project.
Perodua president and chief executive officer Datuk Zainal Abidin Ahmad said Perodua has the capacity to be a possible contract manufacturer for the project.
“Perodua has given a proposal to the government on its vendor system, which could be beneficial to the project, ” he said following a signing ceremony between the Malaysia Automotive Robotics and IoT Institute (MARii), Perodua, the Perodua Suppliers Association and Perodua Dealers Association earlier yesterday.
International Trade and Industry Senior Minister Datuk Seri Mohamed Azmin Ali, who was present at the event, said the third national car project is still ongoing.
“Despite having a new government, the project is still on, ” he said.
Back in February, former Prime Minister Tun Dr Mahathir Mohamad said that a prototype for the third national car was ready and that the government was waiting for private investors to invest in the development of the project.
Dr Mahathir said Malaysia was open to working with foreign companies to develop the new national car, adding that Malaysia already had the experience, having developed both Proton and Perodua with Japan previously.
It was previously reported that DreamEdge Sdn Bhd, the anchor company to drive the third national car project, was aiming to unveil its first prototype by March this year.
DreamEdge is an engineering services company catering to various industries such as automotive, rail, electronics, energy, defence, precision equipment and tooling design.
MARii chief executive officer Datuk Madani Sahari (pic below) said the vehicle be revealed later this year.
Perodua closed the month of June with 21,250 vehicles sold, its highest monthly sales figure this year and nearly triple that of the previous month’s.
The carmaker’s year-to-date sales total stands at 74,000 units.
Zainal said it would be difficult to forecast the outlook for the automotive industry for the rest of 2020, in light of the uncertainties and challenges created by the Covid-19 pandemic.
“It’s difficult to predict, but we will strive to continue doing our best and make sure that the ecosystem will continue to survive. We had made an initial forecast and yes, there has been a slowdown in sales. But for now, our strategy for the remainder of 2020 is to stay with what we had targeted to achieve before the movement control order (MCO).”
In January this year, Perodua targeted to sell 240,000 vehicles for 2020. At the moment, Zainal said sales could fall between 15% and 17% this year from the original target.
Perodua is however, expected to make an official announcement on its 2020 sales target later this month.
From the announcement made by PM on 5 June, the newer price list only out in subsequent week, so actually the impact of sales rebate only taking place in 2nd half of June.
So actually the push up of sales due to PENJANA is just taking pace in 2nd half of June, with such a surge in sales for whole month of June really surprise to all.
Can imagine the full month impact starting from July onwards, the sales figure may highly likely to overtake June figures. looking for it
Dont forget 9 cents dividends entitlement prior 9 July (next week).
TA Securities expects bumpy 2H earnings recovery for automotive sector on weak sentiment
By Syafiqah Salim | theedgemarkets.com | 2020-07-27 12:30:39 KUALA LUMPUR (July 27): TA Securities Research has maintained its ‘"underweight" rating of the automotive sector and said it expects weak sentiment to result in a bumpy earning recovery in the second half of 2020 (2H20).
The research house's analyst Angeline Chin maintained her "sell" recommendations for MBM Resources Bhd with a target price (TP) of RM3.09, Pecca Group Bhd (TP: 79 sen), Sime Darby Bhd (TP: RM1.71) and UMW Holdings Bhd (TP: RM1.85).
Meanwhile, she noted that Bermaz Auto Bhd (BAuto), with a TP of RM1.77, was still rated as a "buy" as the stock provides a total potential upside of more than 12%.
According to the Malaysian Automotive Association (MAA), the country’s auto sector total industry volume (TIV) plunged by 41.1% year-on-year (y-o-y) to 174,675 units in 1H20 amid the Covid-19 pandemic and the implementation of the movement control order (MCO).
Chin said the MAA had revised upward its 2020 TIV forecast by 18% to 470,000 units from 400,000 units previously. Meanwhile, it increased its passenger vehicle sales forecast by 18.8% to 427,700.
“That said, the revised forecasts suggest that 2H20 TIV would be around 295,300 units or 4.1% lower than in 2H19.
“Note that the MAA’s forecast of 470,000 units is 9% higher than our 2020 TIV forecast of 431,000 units. We do not expect the proliferation of car sales during the tax holiday period in 2018 to repeat this time due to absence of pent-up demand, which was seen in the last tax holiday period.
“In addition, weakening consumer sentiment and stringent hire purchase loan requirements may dampen TIV growth. As such, we keep our TIV forecast for 2020 unchanged at 431,000 units, or a 29% decline year-on-year, due to challenging market conditions,” she wrote in a note today.
MAA reported a rebound in Jun TIV to 44.7k units (+94.7% MoM; +5.1% YoY) mainly driven by SST exemptions since mid-Jun. However, YTD TIV still dropped -41.2% YoY to 172.2k units, affected by Covid-19 during earlier of the year. Nevertheless, we expect a rebound in TIV in 2H20, mainly driven by lower car prices by 2-7% during SST exemptions until 31 Dec. We maintain our 2020 TIV expectation to 492.0k units (-18.6% YoY), after accounting for the lengthened MCO period (albeit eased) and higher demand during SST exemption period. We maintain OVERWEIGHT on automotive sector on selective stock approach in view of the recovery in 2H20, with top picks of DRB (TP: RM2.52); MBMR (BUY; TP: RM5.00) and Sime Darby (BUY; TP: RM2.55).
Malaysian Automotive Association (MAA) reported Jun 2020 TIV which started to normalise at 44.7k units, rebounding +94.7% MoM (due to low base) and +5.1% YoY. This follows from the relaxation of MCO (to CMCO) from 4 May and implementation of SST exemptions since 15 Jun. However, TIV still dropped -41.2% YTD (to 172.2k units), affected by MCO and deteriorated consumer sentiment. With the introduction of SST exemption (car prices have reduced 2-7%; paultan.org) and PENJANA measures from 15 Jun to 31 Dec 2020, we expect a recovery in TIV for 2H20. We maintain our 2020 TIV forecast to 492.0k units (-18.6% YoY), after taking into account of the eased MCO period and government’s stimulus plan.
As we expect a rebound in TIV in 2H20, we maintain our OVERWEIGHT rating on the sector with a stock selective approach with 4 BUY and 3 HOLD recommendations. Our top picks include DRB (BUY; TP: RM2.52) and MBMR (BUY; TP: RM5.00), leveraging to national marques during the recovering phase in 2H20-2021 as well as Sime Darby (BUY; TP: RM2.55) for its strong balance sheet and potential leverage to the China market rebound.
Note that MAA was unable to provide TIV breakdown for Jun 2020 due to some unforeseen circumstances and only able to provide the total new car sales for the month. The following breakdown is based on respective disclosure from the companies and MAA’s Jan-Jun market review:
Perodua (UMW and MBMR) sales have normalised back to 21.3k units in Jun (+32.5% YoY; +169.5% MoM) while its market share sustained at a high of 47.5%. The group achieved 74.2k units YTD, a drop of -39.1%, in line with the industry. Perodua is cautiously optimistic for 2H20, banking on the SST exemptions. Upcoming attractive new launch include new SUV D55L (Kembara).
Proton (DRB) had a similar experience with a rebound in sales to 9.6k units (+26.4% YoY; +69.5% MoM), upholding its market share at 21.5%. YTD, the group outperformed the market with only a drop of -14.8% YoY to 37.1k units. Management is targeting 100k unit sales in 2020. Upcoming new line up launch is the highly anticipated X50 CKD in 2H20.
Honda (DRB) sales remained disappointing with only 3.3k units (-38.4% YoY; +23.9% MoM). YTD, sales dropped -61.3% to 17.1k units, worse than the industry. Honda is expecting greater sales in 2H20 with the introduction of BR-V facelift, CR-V facelift and new City to mitigate the negative impact in 1H20.
Toyota (UMW) registered sales volume of 4.3k units (-16.8% YoY; +26.9% MoM) and 18.2k units YTD (-41.7% YoY), underperforming industry trends. We expect Toyota to face stiff competition for the remaining 2020 following the expected attractive launches by close competitors during the year.
Nissan (TCM) continued to record disappointing sales at only 0.9k units (-41.0% YoY; +42.1% MoM), with YTD sales at 4.3k units (-58.9% YoY), due to its lack of attractive new model launches. Management has indicated upcoming new Almera is due to launch in 2H20 while the new Kicks and Sylphy may only come post 2020.
Source: Hong Leong Investment Bank Research - 28 Jul 2020
Change in the Interest of Substantial Shareholder (202009183600239) Company Name MBM RESOURCES BHD Stock Code / Short Name 5983 / MBMR Date & Time Announce 18/09/2020 07:00:01 AM Subject Changes in Sub. S-hldr's Int (Section 138 of CA 2016)
Content Substantial Shareholder's Particulars Name : EMPLOYEES PROVIDENT FUND BOARD Address : Tingkat 19, Bangunan KWSP Jalan Raja Laut 50350 Kuala Lumpur Wilayah Persekutuan Malaysia NRIC/Passport No/Company No. : EPF ACT 1991 Nationality/Country of Incorporation : Malaysia Descriptions(Class & nominal value) : Ordinary Shares
Name & address of registered holder You are advised to read the entire contents of the announcement or attachment. To read the entire contents of the announcement or attachment, please access the Bursa website at http://www.bursamalaysia.com
Details Date of Change No of shares Price Transacted(RM) Transaction type 14/09/2020 145,300 0.000 Acquired
Description of other type of transaction : Circumstances by reason of which change has occured
Nature of interest : Direct Interest Direct (units) : 37,759,879 Direct (%) : 9.660%
Total no of shares after change : 37,759,879 Date of notice : 15/09/2020
Remarks You are advised to read the entire contents of the announcement or attachment. To read the entire contents of the announcement or attachment, please access the Bursa website at http://www.bursamalaysia.com
Change in the Interest of Substantial Shareholder (202009233800252) Company Name MBM RESOURCES BHD Stock Code / Short Name 5983 / MBMR Date & Time Announce 23/09/2020 07:00:01 AM Subject Notice of Interest Sub. S-hldr (Section 137 of CA 2016)
Content Substantial Shareholder's Particulars Name : LEMBAGA TABUNG HAJI Address : 201, Jalan Tun Razak Peti Surat 11025 50732 Kuala Lumpur Wilayah Persekutuan Malaysia NRIC/Passport No/Company No. : Act 535(Tabung Haji Act, 1995) Nationality/Country of Incorporation : Malaysia Descriptions(Class & nominal value) : Ordinary Shares
Name & address of registered holder You are advised to read the entire contents of the announcement or attachment. To read the entire contents of the announcement or attachment, please access the Bursa website at http://www.bursamalaysia.com
Details Date of Change No of shares Price Transacted(RM) Transaction type 21/09/2020 67,500 0.000 Acquired
Description of other type of transaction : Circumstances by reason of which change has occured
Nature of interest : Direct Interest Direct (units) : 19,582,800 Direct (%) : 5.010%
Total no of shares after change : 0 Date of notice : 22/09/2020
Remarks (1) Lembaga Tabung Haji (18,818,600)(2) CIMB Group Nominees (Tempatan) Sdn Bhd - AIIMAN Asset Management Sdn Bhd for Lembaga Tabung Haji (155,900)(3) Cartaban Nominees (Tempatan) Sdn Bhd - AmIslamic Fund Management Sdn Bhd for Lembaga Tabung Haji (608,300)MBM Resources Berhad received the Notice of Interest of Substantial Shareholder pursuant to Section 137 of the Companies Act 2016 dated 22 September 2020 from Lembaga Tabung Haji on 23 September 2020. You are advised to read the entire contents of the announcement or attachment. To read the entire contents of the announcement or attachment, please access the Bursa website at http://www.bursamalaysia.com
Change in the Interest of Substantial Shareholder (202010053600249) Company Name MBM RESOURCES BHD Stock Code / Short Name 5983 / MBMR Date & Time Announce 05/10/2020 06:02:34 PM Subject Changes in Sub. S-hldr's Int (Section 138 of CA 2016)
Content Substantial Shareholder's Particulars Name : LEMBAGA TABUNG HAJI Address : 201, Jalan Tun Razak 50400 Kuala Lumpur Wilayah Persekutuan Malaysia NRIC/Passport No/Company No. : Act 535(Tabung Haji Act, 1995) Nationality/Country of Incorporation : Malaysia Descriptions(Class & nominal value) : Ordinary Shares
Name & address of registered holder You are advised to read the entire contents of the announcement or attachment. To read the entire contents of the announcement or attachment, please access the Bursa website at http://www.bursamalaysia.com
Details Date of Change No of shares Price Transacted(RM) Transaction type 01/10/2020 216,500 0.000 Acquired 02/10/2020 68,800 0.000 Acquired
Description of other type of transaction : Circumstances by reason of which change has occured
Nature of interest : Direct Interest Direct (units) : 19,903,100 Direct (%) : 5.092%
Total no of shares after change : 19,903,100 Date of notice : 05/10/2020
Remarks You are advised to read the entire contents of the announcement or attachment. To read the entire contents of the announcement or attachment, please access the Bursa website at http://www.bursamalaysia.com
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....
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https://www.theedgemarkets.com/article/auto-players-shares-soar-after-pm-announces-sales-tax-exemption