1. Slowing car sales
THE re-introduction of the movement control order (MCO 2.0) has impacted car sales, according to the country’s biggest automotive group.
The Malaysian Automotive Association (MAA), in its latest monthly industry report, said sales of new vehicles in January plunged 24% to 32,829 units – the lowest in seven months.
On a month-on-month basis, January sales were down 51% compared with 68,836 units in December 2020.
MAA expects the figure to be lower in February due to the Chinese New Year holidays and shorter working month.
Last month, MAA had forecast total industry volume (TIV) to grow from 529,000 units in 2020 to 570,000 units in 2021, driven by a recovery in economy activities, extension in sales tax holiday to June 30 and lower hire-purchase loan interest rates.
Analysts said while MCO 2.0 could lead to lower TIV in the first quarter, sales are expected to accelerate from the second quarter onwards, in line with projected growth in the broader economy.
2. Bumper harvest for planters
Kuala Lumpur Kepong Bhd signals rising profits in the coming quarters, as higher price of crude palm oil (CPO) boosted its earnings in the three months ended Dec 31.
The company said its average CPO selling prices during the quarter was RM2,703 a tonne, or 22.5% higher from a year ago.
Another big producer, Sime Darby Plantations Bhd, also announced sharply higher profits for the quarter as its average CPO selling prices rose 19%.
The rising profit trend for planters is set to continue this quarter with CPO prices on the futures market hovering at elevated levels.
CGS-CIMB Research estimated that in January, average CPO prices rose 3.5% compared with in December and was 24% higher at RM3,748 a tonne from a year ago.
3. Kossan catching up
Kossan Rubber Industries Bhd posted a net profit of RM1bil for the year ended Dec 31, or more than four times higher than what it had achieved a year ago.
In 2021, analysts predicted that the company’s earnings would swell to RM2.5bil, or about RM1 per share.
Trading at RM4 a piece, the stock is a bargain at its current market price.
Analysts said Kossan’s exceptional growth is driven by rising average selling prices (ASPs) of gloves.
Kossan raised its ASPs by about 55% in the last quarter of 2020 and has forecast another 50% increase in the first quarter.