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Thursday, September 25, 2014

MBM is top pick for Maybank IB


MBM Resources Bhd is Maybank IB Research’s new top pick over Berjaya Auto Bhd for its more compelling valuations as the research firm keeps its “overweight” call on the automotive sector.

UMW Holdings Bhd (UMWH) remains a “buy” while Tan Chong Motor Holdings Bhd is a “sell”, Maybank Research said in a report yesterday.

Maybank IB also keeps its 2014 total industry volume (TIV) forecast unchanged, but expects a slight upside from the launch of the all-new Perodua Axia and Proton Iriz this month.

Axia, launched last week, has recorded bookings of 13,500 units (three to four months order book), while Iriz is expected to be unveiled this week.

“As such, we expect September to October TIV to be stronger — above the 55,000-unit level. Taking into account major launches in this quarter and a seasonally stronger second half (from Hari Raya, Merdeka and year-end sales campaigns), we see slight upside to our 2014 TIV forecast of 675,000 (an increase of three per cent year-on-year).

“Pending more details on these launches, we keep our TIV forecast unchanged for now,” Maybank IB said.

The research house foresees more attractive launches in the pipeline, which will spur buying interest in the coming months.

“We note that the auto players are now focused on more economical cars (like compact, hybrid and fuel-efficient models) in view of the rising cost of living and Goods and Services Tax implementation in April next year.”

Maybank IB said last month’s TIV of 51,125 units is 66 per cent of its TIV forecast for this year.

“August’s vehicle sales slowed down from a high base in July during the aggressive Hari Raya sales campaign. Post-Hari Raya, consumers adopted a wait-and-see approach in anticipation of new A/B-segment launches by the national marques.

“Except for Mazda and Honda, all major marques recorded month-on-month contraction with Volksvagen and the national marques being the biggest losers. Mazda grew on stronger demand for the sports utility vehicle CX-5 while Honda maintained its position with the new B-segment Jazz supporting sales,” it said.

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