PETALING JAYA: Despite recently posting its seasonally weakest quarter, analysts anticipate earnings for MBM Resources Bhd
to bounce back in the group’s second quarter of financial year 2026 (2Q26).
“We expect earnings to recover strongly in 2Q26 on a longer working quarter leading with Perusahaan Otomobil Kedua Sdn Bhd’s (Perodua) strong April sales boost expected to rise by 17% year-on-year (y-o-y),” Kenanga Research said.
Essentially, the research house attributed the subdued performance largely to scheduled plant shutdowns involving its major principals and customers, as well as its 23%-owned associate Perodua, amid the closer succession of Chinese New Year and Hari Raya Aidilfitri holidays compared with the previous year.
It highlighted the group’s core net profit (CNP) fell 37% quarter-on-quarter (q-o-q) and 11% year-on-year (y-o-y), further dragged by its 23%-owned Perodua, which contributed weaker associates’ profit. Revenue declined 26% q-o-q and 5% y-o-y.
MBM’s q-o-q significant drop was driven by stronger production for Perodua vehicles in 4Q25 alongside the introduction of the all-new Perodua Traz and year-end sales promotion to clear out-going models particularly Perodua Myvi (new Myvi launch is expected by end-2026 or early-2027), according to Kenanga Research.
On the other hand, the research house noted strong sales performance from the group’s new Jaecoo dealership, with 1Q26 sales volume rising 58% to 3,985 units, driven mainly by its best-selling model, the Jaecoo J7.
The group’s other premium models including Daihatsu commercial vehicles, Volvo and Volkswagen vehicles remained affected by intense competition in the non-nationals space, it added.
Hong Leong Investment Bank (HLIB) Research also pointed out that MBM’s after-sales volumes have been improving, alongside the recent appreciation of the ringgit which is expected to benefit Perodua through lower input costs.
Broadly, analysts remain positive on MBM’s prospects, citing strong earnings visibility and an attractive dividend yield.
Kenanga Research highlighted the group’s healthy Perodua vehicle order backlog, its effective proxy exposure to the mass-market Perodua brand through a 23% stake in Perodua, and an appealing dividend yield of about 9%.
MBSB Research noted the group implied a dividend payout ratio of 70% after announcing a final single-tier dividend of 21 sen for the financial year ending December 2025 (FY25), which brought total dividends for FY25 to 60 sen.
The research house also rolled forward its valuation base year, noting a moderate adjustment in target price from RM6 to RM6.14, based on seven times multiple of MBM’s FY27 earnings per share.
MBSB Research maintained its “buy” call, underpinned by the stock’s valuation trading at around one standard deviation below its five-year historical mean, alongside an attractive dividend yield of approximately 10.1%.
Additionally, HLIB Research said MBM is in a strong net cash position (62.2 sen per share) with sustainable earnings and cash flow by leveraging Perodua’s strong sales.
MBM reported a core net profit of RM63.5mil in 1Q26, accounting for 19%-20% of consensus’ full-year estimates, it said.
MBSB Research also detailed the group’s motor trading and assembly profits contracted more sharply by 40% y-o-y in 1Q26 because of heavier discounting to clear last year’s inventory.
