PETALING JAYA: MBM Resources Bhd
’s prospects for the coming quarter could be weighed by slower output from Perusahaan Otomobil Kedua Sdn Bhd (Perodua) as it diverts production lines for new models, as well as startup losses from the national carmaker’s Smart Mobility plant.
Kenanga Research said it came away from the automotive group’s second-quarter (2Q26) results briefing with mixed feelings, noting that management is guiding for a normalisation in 3Q26 sales following Perodua’s July sales that saw a 16% month-on-month rise to 31,842 units.
The expected moderation in sales is due to a slowing down in Perodua production capacity as it begins to shift production lines in favour of new models such as the Perodua Ativa Hybrid and the Perodua Myvi. Extended public holidays in August and September are also anticipated to contribute to production slowing.
Additionally, MBM Resources indicated that it is likely to see startup losses from Perodua’s Smart Mobility plant in the second half of its financial year 2026 (2H26), as production gradually ramps up to meet demand.
While bookings were at almost 2,000 units as of August 2026, commercial production has been producing at a rate of below 100 units a month due to suppliers’ quality not meeting Perodua’s standards.
“Coupled with lukewarm response and slow supply, we expect that the startup losses will spill over to 2027 or until Perodua introduces new electric vehicle models that are better suited to its target customers,” Kenanga Research said.
Moreover, the group said there was an automotive parts supply disruption from April 2026 resulting from the Middle East conflict.
While supply of raw materials remains stable for now, rising logistics costs are expected to increase their prices, which will likely be passed on to customers, the research house said.
Nevertheless, MBM Resources anticipates steady growth in its share of associate results, especially from 23%-owned Perusahaan Otomobil Kedua, the producer of Perodua vehicles, with order backlog remaining stable at 35,000 to 40,000 units despite being down from 60,000 in early 2026.
The group also expects consistent sales momentum in its dealerships business, fuelled by new model launches.
Its Jaecoo dealership has notably provided better margins over other brands, with sales in 1H26 up 24% year-on-year (y-o-y) at 181 units, though management acknowledged that competition with other Jaecoo dealers is intensifying.
In a briefing note, MBSB Research pointed out that for 2Q26, Jaecoo recorded a steep unit sales decline of 49.2% y-o-y as competing dealers offered heavy discounts.
Overall, however, the research house predicted the group’s earnings to remain relatively stable, even as Perodua’s sales are expected to moderate from last year’s 359,904 units.
“MBM Resources delivered a resilient performance in 2Q26, supported by steady Perodua sales and production volumes alongside favourable foreign-exchange movements, which underpinned associate contributions,” it said.
MBSB Research has maintained its “buy” rating on the stock and its target price of RM6.14, adding that it is trading at an undemanding minus one standard deviation to its five-year mean and offers an attractive dividend yield of 8.1%.
Meanwhile, Kenanga Research retained its “market perform” call, with an unchanged target price of RM5.
It said it continues to like MBM Resources for its strong earnings visibility backed by an order backlog of Perodua vehicles at around 40,000 units, as a good proxy to the mass-market Perodua brand as the largest Perodua vehicles dealer in Malaysia, 23% stake in Perodua and attractive dividend yield.
