Period 1H12
Actual vs. Expectations
Within ours and the consensus broadly within. The 1H12 net profit of RM70.5m made up 43% of
ours and the consensus’ FY12 full year estimate.
Dividends A single tier interim dividend of 3 sen per
share was declared for the quarter.
Key Result Highlights
1H12 revenue increased by 46% to RM1.2b while the net profit
increased by 18%. This was mainly due to the stabilising sales and supply
post-Japan earthquake.
Sequentially, 2Q12 net profit dropped by 28% despite a 13%
rise in revenue. This was mainly due to higher cost for its Motor Division ie: appreciation in
Yen.
YoY, 2Q12 revenue grew by 61% and net profit soared by 144%
due to the recovery in supply from Japan.
Outlook For 2Q12, the TIV has chalked up a very convincing
automotive sector recovery indication with
an 18% growth
in TIV volume
(QoQ).
Despite the mixed impact from the recovery in supply and
tightening of hire purchase financings, the sector is expected to record positive
growth in FY12.
The next re-rating catalyst for MBM will be its new business
venture i.e. car production as MBM has the assembly license in hand.
Change to Forecasts
No changes in our FY12E earnings, based on TIV growth of
2.3%.
Rating MARKET PERFORM
We are downgrading MBM from OUTPERFORM to MARKET PERFORM due
to limited upside to our Target Price.
Valuation We increase our target price higher to
RM4.24 from RM3.91 based on higher average PER multiple to 9.0x FY13E (previously
8.3x).
Risks Slow down in global economy and a further tightening
in hire purchase financing.
Source: Kenanga
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