KUALA LUMPUR: Affin Hwang Capital Research has maintained its Neutral rating on the auto and autoparts sector and its 2018 total industry volume (TIV) growth assumption of 4.7%, given the exciting new models to be launched in 2018.
Perodua's 2017 sales of 204,900 units was 1% lower on-year but the research firm remains optimistic on the car manufacturer with expectations of its sales to accelerate in 2018.
The new MyVi that was launched in 4Q17 has recieved over 28,000 bookings, of which only 8,000 have been delivered as of December 2017.
Proton's performance was weaker, with cumulative 2017 sales of 71,000, which was 2% lower on-year, despite attractive year-end promotions due to stiff competition and bland car models.
Affin Hwang Research projects a 4.7% TIV in view of likely improved consumer sentiment, pent-up demand following previous years' weak sale and a strong of new model launches in 2018.
"Tight auto loan financing remains the biggest challenge for the sector, with no sign of easing at this juncture. For exposure, Sime Darby (SIME MK, RM2.90, HOLD) and MBMR (MBM MK, RM2.40, HOLD) are our relative preferences for their likely sustainable earnings per share growth in 2018-19."
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