Stock Name: MBMR
Company Name: MBM RESOURCES BHD
Automotive sector
Maintain underweight: The month-on-month (m-o-m) contraction in September's vehicle sales was widely anticipated following the rush of deliveries in August and August being shorter working month because of the Hari Raya Aidilfitri and Merdeka holidays. Overall, we expect a seasonally softer sales trend in 4Q from 3Q total industry volume (TIV) of 153,041 units. We continue to be bearish on the sector on softer consumer spending in light of a potential global economic slowdown. The sector remains an 'underweight' and we retain our 'hold' calls on UMW Toyota Motor Sdn Bhd and MBM Resources Bhd, and 'sell' calls on Proton Holdings Bhd and Tan Chong Motor Holdings Bhd.
The January to September TIV was 450,244 units (-0.7% year-on-year), broadly on track to meet the Malaysian Automotive Association's full-year estimate of 608,000 units in 2011.
While all major marques experienced negative growth in September, Honda registered a strong 14.3% m-o-m rise in sales to 3,199 units. In terms of market share, non-national marques gained 5% market share m-o-m over nationals, largely contributed by resilient sales of Honda and Toyota vehicles.
We project softer car sales in 4Q11 owing to the seasonally weak consumer demand. We think certain completely built-up models and auto parts imported from Thailand could be affected by the temporary shutdown of some parts manufacturers in Ayutthaya. In the event of a prolonged flood, Malaysian manufacturers may experience severe supply shortages as the bulk of auto components are sourced from Thailand.
The recently announced Budget 2012 was practically a non-event to the sector. We think the domestic market is near saturation. As such, we maintain our TIV forecast of 595,000 to 600,000 units for 2011. Stock-wise, we expect share prices to trade sideways. ' Maybank IB Research, OCt 18
This article appeared in The Edge Financial Daily, Ocotber 19, 2011.
Company Name: MBM RESOURCES BHD
| Research House: MAYBANK | Price Call: HOLD | Target Price: 3.10 |
Automotive sector
Maintain underweight: The month-on-month (m-o-m) contraction in September's vehicle sales was widely anticipated following the rush of deliveries in August and August being shorter working month because of the Hari Raya Aidilfitri and Merdeka holidays. Overall, we expect a seasonally softer sales trend in 4Q from 3Q total industry volume (TIV) of 153,041 units. We continue to be bearish on the sector on softer consumer spending in light of a potential global economic slowdown. The sector remains an 'underweight' and we retain our 'hold' calls on UMW Toyota Motor Sdn Bhd and MBM Resources Bhd, and 'sell' calls on Proton Holdings Bhd and Tan Chong Motor Holdings Bhd.
The January to September TIV was 450,244 units (-0.7% year-on-year), broadly on track to meet the Malaysian Automotive Association's full-year estimate of 608,000 units in 2011.
While all major marques experienced negative growth in September, Honda registered a strong 14.3% m-o-m rise in sales to 3,199 units. In terms of market share, non-national marques gained 5% market share m-o-m over nationals, largely contributed by resilient sales of Honda and Toyota vehicles.
We project softer car sales in 4Q11 owing to the seasonally weak consumer demand. We think certain completely built-up models and auto parts imported from Thailand could be affected by the temporary shutdown of some parts manufacturers in Ayutthaya. In the event of a prolonged flood, Malaysian manufacturers may experience severe supply shortages as the bulk of auto components are sourced from Thailand.
The recently announced Budget 2012 was practically a non-event to the sector. We think the domestic market is near saturation. As such, we maintain our TIV forecast of 595,000 to 600,000 units for 2011. Stock-wise, we expect share prices to trade sideways. ' Maybank IB Research, OCt 18
This article appeared in The Edge Financial Daily, Ocotber 19, 2011.
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