For purpose of sharing, I am presenting my homeworks about news of Mercedes Benz Malaysia, Malaysia cars sales for past 9 years, results & historical stock prices of CCB.
I also list down the reasons why I tag CCB as the Safe & Undervalued Stock. (Please refer bottom section for details)
NEWS IN THE NEWS
We have been reading news about Mercedes Benz Malaysia from various news media since the start of new year 2016, below are some of it:
4/1/2016 (The Edge): S400L & E300 BlueTec hybrid received extension on import duty & excise tax exemptions
8/1/2016 (TheStar): Mercedes-Benz Malaysia posts record vehicle sales in 2015
On 8 Oct 2015, Malaysia's famous automotive blogger paultan.org has written the following news:
Here’s a shocker – Mercedes-Benz
Malaysia (MBM) has announced reduced prices for all its current W205
C-Class variants sold in Malaysia, and has introduced two new variants
at the same time.
Would you believe that? Whilst automotive distributors in the country, such as UMW Toyota Motor and Perodua are raising their prices to cope with the troubling devaluation of the ringgit, MBM seems to be charging full steam ahead, slashing its prices, and charting records sales month after month.
Source: paultan.org
Interesting Quate from The Industry Handbook: Automobiles
Would you believe that? Whilst automotive distributors in the country, such as UMW Toyota Motor and Perodua are raising their prices to cope with the troubling devaluation of the ringgit, MBM seems to be charging full steam ahead, slashing its prices, and charting records sales month after month.
Source: paultan.org
Interesting Quate from The Industry Handbook: Automobiles
Automobiles depend heavily on
consumer trends and tastes...... Taking consumer and business confidence
into account should be a higher priority than considering the regular
factors like earnings growth and debt load.
MALAYSIA CARS SALES RECORDS (2007-2015)
Mercedes Benz Malaysia (MBM) has regained its leadership position in premium luxury brands in Malaysia in 2015, after losing its position to BMW & Volkswagen from 2011 to 2014.
DARK PERIOD: LOSING GROUND TO BMW & VOLKSWAGEN
As CCB is the largest dealership for Mercedes Cars, losing position to both Volkswagen & BMW is a nightmare to CCB. As a result, results & share price of CCB was deteriorating simultaneously during the same period as shown at the below chart:
GLORIOUS YEAR FOR MBM & CCB: 2015
Following strong sales of the E300 BlueTEC Hybrid, which was launched
in January 2015, the C200 and S400L Hybrid, 2015 has become the Glorious
Year to Mercedes Benz Malaysia. (Source: MBM Website)
Summary of Findings:
1. Mercedes Benz Malaysia total units sold up 70%
2. CCB Revenue increased 86%
3. CCB Profit increased 493%
4. CCB Price up 76% (RM1.92@ 31/12/2014 to RM3.38 @ 31/12/2015)
5. BUT PE Ratio has dropped from 18.7 times to merely 7.5 times
2. CCB Revenue increased 86%
3. CCB Profit increased 493%
4. CCB Price up 76% (RM1.92@ 31/12/2014 to RM3.38 @ 31/12/2015)
5. BUT PE Ratio has dropped from 18.7 times to merely 7.5 times
CCB: Safe & Undervalued Stock
Reasons:
1. New Mercedes Cars designs are just started paying off, there are few more years to go2. CCB is largest dealership for Mercedes Benz Malaysia
3. Competitive Advantages to other dealership due to 49% JV in Mercedes Benz Malaysia
4. Better Managed Operations due to higher margin compared to nearest competitor, Hap Seng Star.
5. Clean & Straight foward balance sheet & good cash flow management
6. Current PE is way below past years' average historical PE 13.9
7. Lowest PE among all cars distributors listed in Bursa
(Special note: I will discuss items 3&4, my near term target price of RM4.53 & projection for 2016 in my next article)
Rolling PE ratios for other cars distributors:
UMW Holdings (Toyota) : 26.59
Tan Chong Motor (Nissan) : 21.82
Hap Seng Consolidated (Mercedez Benz) : 13.75
Berjaya Auto (Mazda) : 9.88
MBMR (Produa) : 8.82
RECOMMENDED LINKS:
1. (SuperMan 99) Cycle & Carriage Bintang (CCB) - The Forgotten Star with 73% potential upside!!!2. (SuperMan 99) Cycle & Carriage Bintang (CCB) - Special Dividends & Amazing Cash Flows Management
3. Tradeview - Value Picks (4Q2015) Gadang / CCB / Apollo
4. Mercedes Benz Design Should Pay Off At The Bottom Line
Sources/Links:
2. 2013 Cars Sales Report - http://www.maa.org.my/pdf/Market_Review_2013.pdf
3. 2012 Cars Sales Report - http://www.maa.org.my/pdf/Market_Review_2012.pdf
4. 2011 Cars Sales Report - http://www.maa.org.my/pdf/Market_Review_2011.pdf
5. 2010 Cars Sales Report - http://www.maa.org.my/pdf/market-review-for-2010.pdf
6. 2009 Cars Sales Report - http://www.maa.org.my/data/marketoutlook.pdf
7. 2008 Cars Sales Report - http://www.marklines.com/en/report/rep1061_201203
8. 2007 Cars Sales Report - http://www.marklines.com/en/report/rep1061_201203
Declaration & Disclaimers:
I have interest & own shares in this company.All the above are merely presented & written for sharing, educational & reference purposes and does not constitute as recommendation to purchase/buy or sell. You should make your investing decision based on your own judgement & at your own risk. I will not be responsible nor liable for your action.
(SuperMan 99) Cycle & Carriage Bintang (CCB) - Glorious Year 2015 (& 2016?)
http://klse.i3investor.com/blogs/hardworkeasylifesuperman99/89507.jsp
