Period 3QFY12/9MFY12
Actual vs. Expectations
Below ours and the consensus’
estimates.
9M12 net profit of RM105.9m made up 65% and 68% of ours and
the consensus’ FY12 earnings respectively.
Dividends No dividend was declared.
Key Result Highlights 9M12 net profit increased by ~12% YoY to RM150m
due to better sales and a better performance from its manufacturing division.
At the operating level, the manufacturing profit jumped by by 360% due to the
impact from the consolidation of Hirotako’s earnings coupled with the increases
in demand and production.
YoY, 3Q12 net profit of RM35.5m grew marginally at 0.4% due
to a higher interests cost incurred by the holding company from the drawdown of
short-term loans (+54%). The additional loans were mainly raised to finance the
acquisition of Hirotako.
QoQ, the revenue slid by ~5% due to a slower sale, which was
in line with the drop in the TIV during the quarter (-3.4%). However, the net
profit rose by 20% due to higher contributions from its associates and a better
utilisation rate at the manufacturing division.
Outlook We expect the growth to be slightly
better in 4Q12 due to the recent launches of a few new models. There is no
change to our FY12 TIV growth assumption of 2.4% at this juncture.
Change to Forecasts We have trimmed our FY12-FY3E by 7% and
13% respectively as we have factored in a higher operating and financial cost
to align it with our latest outlook and its latest results to date.
Rating Maintaining
MARKET PERFORM
Due to the less attractive upside (+8% from here) of the
stock after our revision in the target price (“TP”), we are maintaining our
Market Perform recommendation.
Besides, we also believe that the auto sector is likely to
consolidate in the near term due to the absence of catalytic news i.e. NAP
revision, etc.
Valuation We have lowered our TP from RM4.24 to
RM3.68 on our revised lower forecasts, pegging it at an unchanged FY13E 9x PER.
Risks A decline in consumer sentiment and a
stricter HP financing.
Source: Kenanga
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