MBMR (5983) - Hot Stock: MBM Resources surges 10% on Perodua sedan nationwide booking

KUALA LUMPUR (July 18): MBM Resources Bhd (MBMR), 20%-stake owner in national carmaker Perusahaan Otomobil Kedua Sdn Bhd (Perodua), surged nearly 10% this morning as bookings for its first-ever sedan, Perodua Bezza, opened on Saturday.

At 11.32 a.m., MBM Resources rose 9.59% or 21 sen to RM2.40, with 610,500 shares done, for a market capitalisation of RM855.6 million.

According to media reports, Perodua projects bookings of about 85% would be made for its 1.3 litre model and the remaining 15% for its 1.0 litre model.

Perodua expects 15,000 bookings on average in the first three months of sales of Bezza, with a monthly 10,000 units average registration in new model’s first three months before tapering to 7,700 units later.

Last Friday, AmInvestment Research projected MBMR’s net profit growth to be 8% for the financial year ending Dec 31, 2016 (FY16) versus a 25% contraction last year.

It also made the forecast on strong Perodua sales under Daihatsu Malaysia Sdn Bhd from the Axia (model) and upcoming sedan, efforts to improve volume in Federal Auto via Volkswagen at the expense of the segment’s already strained margins (less than 1%) and signs of recovery in Oriental Metal Industries (M) Sdn Bhd, as the production of alloy wheels is ramped up to serve new models from Perodua and other customers.

AmInvestment believed the price earnings ratio (PER) of 9.5 times — below its three-year average historical forward PER of 11.8 times — was justified, given that earnings are increasingly dominated by its 20% stake in Perodua, the group’s auto sales sans Perodua continue to suffer from soft consumer sentiment, and its auto parts segment will take at least another year to break even.

It made a “hold” call and a future value (FV) of RM2.30 per share — pegged at 9.5 times PER FY16 forecast earnings per share.

Stakeholders in Perodua include MBMR and UMW Corp Sdn Bhd, as well as Daihatsu Motor Co. Ltd. (20%), PNB Equity Resources Corporation Sdn Bhd (10%), Mitsui & Co. Ltd (7%) and DMSB (5%).

MBMR (5983) - Hot Stock: MBM Resources surges 10% on Perodua sedan nationwide booking