PETALING JAYA: Despite the stable sales of Perodua vehicles remaining the mainstay of MBM Resources Bhd
(MBMR), the outlook for the company has turned cautious as the market digests MBMR’s financial results for the first quarter ended March 31, 2025 (1Q25).
It saw net profit decline by 11% and revenue drop by 7% compared with the same quarter a year ago on reduced sales.
TA Research has maintained a “sell” recommendation on the stock with an unchanged target price of RM5.03 following the 1Q25 results that saw numbers weighed down by softer vehicle sales and reduced contribution from associates.
“While Perodua remains a strong volume driver, MBMR faces rising pressure from aggressive pricing of Chinese entrants and competition in key segments,” the research house said, adding that there were potential new offerings in the RM100,000 to RM200,000 price range together with an expansion through a low-cost Audi dealership in Skudai, Johor, as part of strategic expansion plans.
Following a briefing with MBMR’s management, Maybank Investment Bank Research (Maybank IB Research) maintained a “hold” call on the stockj with an unchanged target price of RM5.63.
“Our ‘hold’ call on MBMR is underpinned by its attractive dividend yield of more that 8%, supported by a 60% dividend payout policy.
“Despite expectations of flattish earnings growth, we believe dividend sustainability remains intact, backed by its strong net cash position. While growth prospects across key marques appear mixed, MBMR is a relatively defensive stock with stable dividends and exposure to the more resilient mass-market leader Perodua,” Maybank IB Research said.
The research house said the company remains on track to meet its Perodua sales target of 345,000 units this year (FY25) despite a soft 1Q25 due to seasonal effects and an excise duty issue that was only resolved in January which temporarily dragged on sales.
“Sales for 2Q25 may remain soft due to scheduled plant shutdowns in April and June, though demand is resilient with a strong backlog of more than 80,000 units, supporting its sales outlook for the second half,” it said.
MIDF Research expects the company to deliver relatively resilient a performance on Perodua sales but has maintained a “neutral” call on the stock with an unchanged target price of RM5.75, viewing it as fairly valued.
Hong Leong Investment Bank Research maintained a “buy” call on the stock with an unchanged target price of RM7.10.
“We see sustainable quarterly earnings, backed by still strong demand for Perodua,” it said
The research housed added the company’s sales of Volkswagen and Volvo vehicles were forecast to remain weak, although this would be mitigated by encouraging orders for models from Chinese electric vehicle maker Jaecoo.
