Stock Name: MBMR
Company Name: MBM RESOURCES BHD
Research House: OSK
KUALA LUMPUR: OSK Research is maintaining its Buy on MBM RESOURCES BHD [] at RM2.59 with a slightly lower target price of RM3.54 from its previous RM3.56 as its lowers the earnings. The research house said on Wednesday, March 17 that MBM's valuations remain attractive, as MBM is still trading at a forward PE of only 6.6 times, making it one of the cheapest auto stock in its coverage backed by its sound balance sheet and its diverse range of vehicle line-up to all kinds of vehicle segments. The report was prepared following a briefing by MBM's on its strategic direction namely, the development of its prime assets to rationalize and strengthen its distributorship network. This will also involve the consolidation of both the Hino and Daihatsu distributorships under a single entity. This will eventually broaden its top-line base coupled with a higher margin from its additional range of new offerings. "While some may highlight concerns on lower dividends, we think otherwise as MBM is backed by its strong balance sheet and increasing cash pile," it said MBM also announced that it has decided to sell its subsidiary, WSA Capital, following an MBO offer of RM11.1 million. "Stripping out WSA's revenue and earnings for FY10-12 and including some housekeeping on the higher capex spending, this reduces our earnings forecast by 1% for FY10-FY11 thus effectively reducing our TP to RM3.54 from RM3.56 with our BUY call maintained," it said.
Company Name: MBM RESOURCES BHD
Research House: OSK
KUALA LUMPUR: OSK Research is maintaining its Buy on MBM RESOURCES BHD [] at RM2.59 with a slightly lower target price of RM3.54 from its previous RM3.56 as its lowers the earnings. The research house said on Wednesday, March 17 that MBM's valuations remain attractive, as MBM is still trading at a forward PE of only 6.6 times, making it one of the cheapest auto stock in its coverage backed by its sound balance sheet and its diverse range of vehicle line-up to all kinds of vehicle segments. The report was prepared following a briefing by MBM's on its strategic direction namely, the development of its prime assets to rationalize and strengthen its distributorship network. This will also involve the consolidation of both the Hino and Daihatsu distributorships under a single entity. This will eventually broaden its top-line base coupled with a higher margin from its additional range of new offerings. "While some may highlight concerns on lower dividends, we think otherwise as MBM is backed by its strong balance sheet and increasing cash pile," it said MBM also announced that it has decided to sell its subsidiary, WSA Capital, following an MBO offer of RM11.1 million. "Stripping out WSA's revenue and earnings for FY10-12 and including some housekeeping on the higher capex spending, this reduces our earnings forecast by 1% for FY10-FY11 thus effectively reducing our TP to RM3.54 from RM3.56 with our BUY call maintained," it said.
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