PETALING JAYA: The market is cautiously reassessing MBM Resources Bhd
’s (MBMR) outlook following the release of the financial results for its first quarter ended March 31, 2025 (1Q25).
MBMR’s net profit declined by 11% and revenue shrank 7% compared with the same quarter a year ago on reduced sales.
The group is involved in the distribution of motor vehicles, assembly and manufacturing of commercial and passenger vehicles, and an automotive parts manufacturing. It is a major distributor for Perusahaan Otomobil Kedua Sdn Bhd’s (Perodua) range of vehicles
MBMR’s results were largely in line with market consensus but analysts cautioned that sales volumes would be subdued this year.
However, they recommend investors hold their positions in the stock, which following an 8% dip year-to-date, has become attractive for its dividend yield.
RHB Research, which has maintained a “neutral” call on the counter with an unchanged target price of RM5.55, said its earnings forecast for this year (FY25) has been maintained because MBMR’s 1Q25 results were in line with expectations.
“While we are forecasting for softer vehicle sales and earnings in FY25, we believe investors should continue to hold on to the stock for its attractive FY25 to FY26 yields of around 9%,” the research house said.
MIDF Research, which maintained a “neutral” call on the stock and revised the target price to RM5.75 from RM5.87, said it expects full-year Perodua sales to decline by 3.7% as the marque undergoes planned production upgrades while the company’s premium Volvo and Volkswagen offerings would be facing stiffer competition.
CIMB Research maintained a “hold” call on the stock with an unchanged target price of RM5.80 as it projects Perodua sales of 350,000 units against MBMR’s 345,000 sales target.
“Strong demand for Perodua’s key models is expected to support sales volumes. Additionally, Perodua plans to launch two new models this year: one entirely new model, and a facelifted version of an existing model,” the research house said.
Overall, CIMB Research projects total industry volume to contract 7% to 760,000 units this year compared with last year.
It noted that MBMR remains on track to roll out the company’s first electric vehicle in the later part of this year and continues to be focused on long-term value creation, including upgrading and refurbishing existing outlets to improve customer experience, expanding into new locations for better accessibility, and adding new dealerships to strengthen its portfolio.
Meanwhile, Kenanga Research has maintained its “outperform” call on the stock with an unchanged target price of RM6.90 supported by strong earnings visibility.
The research house said MBMR stood as a proxy to demand for Perodua vehicles given its role as the largest distributor, 23% stake in Perodua, production of Perodua vehicles and attractive dividend yield.
