EP Manufacturing (EPMB)’s effort to seek more businesses from Perodua has proven to be the correct strategy, as it offset the decline in revenue from Proton. Furthermore, EPMB’s proposed acquisition of the MEX highway concession from Maju Holdings has yet to be approved by the government. We are ceasing coverage on EPMB due to our internal resource allocation and the stock’s thin trading volume coupled with the lack of interest from investors. We now have a non-rated call on the stock. Our previous call was a trading buy with an FV of RM0.94.
Perodua saves the day as Proton sales dwindle. EPMB’s strategy to seek more businesses from Perodua has proven to be the correct strategy. The higher revenue from Perodua offset the declining revenue from Proton due to the latter’s low vehicle sales, which we foresee could likely persist into 2013 given the lack of key model launches that would spur buyer demand amidst intensifying competition.
Uncertainty on MEX acquisition. EPMB’s proposed acquisition of the MEX highway concession from Maju Holdings has yet to be approved by the government. Given the political controversial nature of the transaction, it is likely that the Government would only announce its approval after the upcoming General Election, followed by a potential toll hike. We understand that EPMB firmly intends to proceed with the acquisition.
Discontinue coverage. We are ceasing coverage on EPMB due to our internal resource allocation and the stock’s thin trading volume coupled with the lack investor interest given the uncertainty whether its MEX (Maju Expressway) acquisition will be approved by the Government. We now have a non-rated call on the stock. Our previous call was a trading buy with an FV of RM0.94.
Perodua saves the day as Proton sales dwindle. EPMB’s strategy to seek more businesses from Perodua has proven to be the correct strategy. The higher revenue from Perodua offset the declining revenue from Proton due to the latter’s low vehicle sales, which we foresee could likely persist into 2013 given the lack of key model launches that would spur buyer demand amidst intensifying competition.
Uncertainty on MEX acquisition. EPMB’s proposed acquisition of the MEX highway concession from Maju Holdings has yet to be approved by the government. Given the political controversial nature of the transaction, it is likely that the Government would only announce its approval after the upcoming General Election, followed by a potential toll hike. We understand that EPMB firmly intends to proceed with the acquisition.
Discontinue coverage. We are ceasing coverage on EPMB due to our internal resource allocation and the stock’s thin trading volume coupled with the lack investor interest given the uncertainty whether its MEX (Maju Expressway) acquisition will be approved by the Government. We now have a non-rated call on the stock. Our previous call was a trading buy with an FV of RM0.94.
Source: OSK
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