Stock Name: MBMR
Company Name: MBM RESOURCES BHD
Stock Name: TCHONG
Company Name: TAN CHONG MOTOR HOLDINGS BHD
Stock Name: UMW
Company Name: UMW HOLDINGS BHD
Stock Name: PROTON
Company Name: PROTON HOLDINGS BHD
MIDF Research has recommended a "buy" for MBM Resources Bhd at a target price of RM3.60 while maintaining a "neutral" on Tan Chong Motor Holdings Bhd at a target price of RM4.94.
MIDF also placed a "neutral" call on UMW Holdings Bhd and Proton Holdings
Bhd at target prices of RM7.00 and RM3.30 respectively.
The research house said the second quarter earnings of MBM and Tan Chong
came within its expectations after factoring the slower vehicle sales volume and
the supply chain disruption due to post-Japan's twin disaster.
The research house contended that the results recorded by both UMW and
Proton were below expectations.
"Nonetheless, we anticipate the shortfall over earnings in the second
quarter of financial year 2011 for the four stocks, to be recovered in the
second half of financial year 2011 as production normalises," MIDF Research said
in its Monthly Review and Outlook of the Automotive Sector here today.
The research house, however, retained its "negative" recommendation on the
automotive sector.
"We expect the impact from the auto supply shortages due to the post-Japan
calamities and the implementation of the amended Hire Purchase Act to be still
felt over the next few months following the intense competition in the near
term," it said.
MIDF Research, however, is maintaining its 2011 total industry volume (TIV)
forecast of 610,324 units, which has factored in lower sales volume due to the
auto supply shortages.
The Malaysian Association Automobile (MAA) had recently revised its
TIV projection for 2011 to 608,000 units from 618,000 units, 2.4 per cent below
the forecast number of MIDF.
MIDF Research said July's TIV rebounded strongly by 20.2 per cent
month-on-month to 50,252 units after three consecutive months of contraction in
vehicle sales, suggesting the start of a recovery on the back of a gradual
ramp-up in
production with the easing of part supply disruption.
"July's strong double-digit sales growth was also supported by a full-month
contribution from the new Perodua Myvi, which was launched in mid-June amid
the pre-Hari Raya sales promotion.
"Based on the encouraging numbers, we expect the August 2011 TIV to continue
the monthly uptrend in sales given the rush for deliveries before Hari Raya,"
MIDF Research said.
Meanwhile, July's vehicle production fell by eight per cent year-on-year to
53,453 units as the auto supply shortage lingers. - Bernama
Company Name: MBM RESOURCES BHD
| Research House: MIDF | Price Call: BUY | Target Price: 3.60 |
Stock Name: TCHONG
Company Name: TAN CHONG MOTOR HOLDINGS BHD
| Research House: MIDF | Price Call: HOLD | Target Price: 4.94 |
Stock Name: UMW
Company Name: UMW HOLDINGS BHD
| Research House: MIDF | Price Call: HOLD | Target Price: 7.00 |
Stock Name: PROTON
Company Name: PROTON HOLDINGS BHD
| Research House: MIDF | Price Call: HOLD | Target Price: 3.30 |
MIDF Research has recommended a "buy" for MBM Resources Bhd at a target price of RM3.60 while maintaining a "neutral" on Tan Chong Motor Holdings Bhd at a target price of RM4.94.
MIDF also placed a "neutral" call on UMW Holdings Bhd and Proton Holdings
Bhd at target prices of RM7.00 and RM3.30 respectively.
The research house said the second quarter earnings of MBM and Tan Chong
came within its expectations after factoring the slower vehicle sales volume and
the supply chain disruption due to post-Japan's twin disaster.
The research house contended that the results recorded by both UMW and
Proton were below expectations.
"Nonetheless, we anticipate the shortfall over earnings in the second
quarter of financial year 2011 for the four stocks, to be recovered in the
second half of financial year 2011 as production normalises," MIDF Research said
in its Monthly Review and Outlook of the Automotive Sector here today.
The research house, however, retained its "negative" recommendation on the
automotive sector.
"We expect the impact from the auto supply shortages due to the post-Japan
calamities and the implementation of the amended Hire Purchase Act to be still
felt over the next few months following the intense competition in the near
term," it said.
MIDF Research, however, is maintaining its 2011 total industry volume (TIV)
forecast of 610,324 units, which has factored in lower sales volume due to the
auto supply shortages.
The Malaysian Association Automobile (MAA) had recently revised its
TIV projection for 2011 to 608,000 units from 618,000 units, 2.4 per cent below
the forecast number of MIDF.
MIDF Research said July's TIV rebounded strongly by 20.2 per cent
month-on-month to 50,252 units after three consecutive months of contraction in
vehicle sales, suggesting the start of a recovery on the back of a gradual
ramp-up in
production with the easing of part supply disruption.
"July's strong double-digit sales growth was also supported by a full-month
contribution from the new Perodua Myvi, which was launched in mid-June amid
the pre-Hari Raya sales promotion.
"Based on the encouraging numbers, we expect the August 2011 TIV to continue
the monthly uptrend in sales given the rush for deliveries before Hari Raya,"
MIDF Research said.
Meanwhile, July's vehicle production fell by eight per cent year-on-year to
53,453 units as the auto supply shortage lingers. - Bernama
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