KUALA LUMPUR: MBM Resources Bhd
may experience a softer first quarter this year on weaker automotive sales that was seen in the Malaysian Automotive Association (MAA) statistics released recently.
The anticipated weaker 1Q25 sales are due to fewer working days from the Chinese New Year holidays and Ramadan period.
According to Maybank Investment Bank (Maybank IB) Research, MBM remains cautiously optimistic on Perodua’s financial year 2025’s (FY25) sales despite an internal target of a 4% drop year-on-year (yoy).
Perodua had also experienced model delays in early January which were resolved by mid-month.
Meanwhile, the research house pointed out that challenges persisted for MBM’s other brands, with only Volvo planning new launches in 2025.
“Jaecoo’s contributions remain small, but the brand aims to double sales in 2025 from its low base following its first model launch in August 2024,” it said.
Maybank IB Research said MBM currently operates one Jaecoo outlet and plans to open a 4S outlet in Segambut (incurring RM7mil to RM8mil capital expenditure or capex) by the second half of financial year 2025, targeting a market share of around 2% to 3%.
Overall, the group FY25 capex is estimated at RM60mil.
Maybank IB Research forecast MBM’s FY25’s dividend payout to be similar to FY24.
“Our FY25 dividends per share forecast assumes a 55% dividend payout ratio.
“MBM’s outlook is buoyed by sustained strong Perodua performance and supported by a civil servant salary hike in December 2024 and a minimum wage increase in February 2025,” it said.
Hong Leong Investment Bank Research (HLIB Research) also noted that the upcoming implementation of fuel subsidy rationalisation in the second half of this year can potentially enhance sales.
It noted a possible tendency of consumers downtrading its car selection pursuant to this as well.
“Separately, the new electric vehicle model pricing and business model are still under examination with potential lease model for its battery components,” HLIB Research said.
Volvo and Volkswagen’s sales remained weak and may be further impacted by the impending High Value Goods Tax as well as fuel subsidy rationalisation, while Hino and Daihatsu commercial sales is affected by limited model offering.
On a brighter note, it said the newly secured Jaecoo dealership continued to receive strong orders, with 122 units registered in in the fourth quarter last year.
HLIB Research maintained its “buy” call on MBM with an unchanged target price of RM7.40 per share, based on a 10% discount to its sum of parts at RM8.21.
