UMW yesterday released its earnings results, which showed a headline net loss of RM44mil in 2Q20.
The results made up only 10% of Maybank IB's full-year estimate but it deems this to be in line given its stronger 2H outlook.
For the second half of the year, Maybank IB has kept its estimates given the stronger outlook.
It said the sales tax exemption on passenger vehicles from mid-June has a positive efect on vehicle sales.
In July, sales for Toyota and Perodua jumped 70% and 9% month-on-month to 7,500 and 23,300 units respectively.
"Overall, we expect UMW to sell 53.6k units (-23% YoY) of Toyota and 175k (-27% YoY) units of Perodua in 2020.
"While our Toyota vehicle sales estimates are comparatively higher than management’s 45k units, our Perodua’s sales target is 17% below Perodua’s 210k units target," it said.
The research house kept its target price of RM3.30 on the stock, which represents 26% upside to Thursday's last traded price of RM2.61.
Meanwhile, Maybank IB said investors should train their sights on UMW Holdings Bhd's next financial year in anticipation of weak FY20 earnings.
"The weak FY20 earnings are well-flagged. Focus should be on FY21 instead," it said in a note.
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