MBM Resources jumps in early trade on better FY22 results

KUALA LUMPUR: MBM Resources Bhd’s shares strengthened by 2.38 per cent this morning after the company reported a significant jump in its earnings and revenue for the financial year ended Dec 31, 2022 (FY22).

At 10.47 am, the company’s shares soared 9.0 sen to RM3.88, with 1.16 million shares traded.

MBM Resources’ net profit jumped 64.4 per cent to RM281.55 million in FY22 from RM171.22 million FY21, while its revenue also increased by 51 per cent to RM2.31 billion from RM1.53 billion previously.

The automotive company attributed its improved performance to the higher revenue from its motor trading and auto parts manufacturing divisions due to the sales tax exemption, higher vehicle supplies and improved operating conditions, among others.

Consequently, MIDF Research raised its FY23 estimates for MBM Resources’ net profit growth to 8.5 per cent to factor in higher Perodua total industry volume (TIV), in line with Perodua’s strong order backlog.

In a note today, it said that Perodua was one of the prime beneficiaries of a cyclical recovery in the auto sector, given its dominant 40 per cent-45 per cent market share.

"Our revised FY23 Perodua TIV of 296,000 (+5.0 per cent year-on-year (y-o-y)) marks another record high but is still more conservative than Perodua management’s internal target of 314,000 (+11.0 per cent y-o-y).

"Meanwhile, our FY23 forecast net profit implies a 4.0 per cent y-o-y growth to another year of record earnings, driven mainly by higher Perodua earnings and a normalised effective tax rate post-Cukai Makmur,” it said. - Bernama