kuala lumpur: RHB Investment Bank Bhd (RHB IB) maintained its ‘overweight’ rating for the automotive sector despite the slowdown in April’s recorded total industry volume (TIV) and total production volume (TPV).
In a memo, the investment bank noted that recently launched models will continue to boost customer orders and corporate earnings, and said it remains positive on the sector.
“We believe that healthy wait times for our major brands will give us revenue visibility, especially for UMW and MBM Resources (MBM).
“The sector also offers attractive yields of 4.0% to 10%, with MBM offering a projected fiscal year 2023 (fiscal year 2023) yield of 10%,” said RHB IB, adding that the It added that it is maintaining its total investment unit (TIV) at 680,000 units.
Recently, the Malaysian Automobile Association (MAA) announced that the TIV in April 2023 was 46,583 units, down 41% month-on-month (month-on-month) and 19% year-on-year (year-on-year), while TPV was 41,160 units (- 46%) was announced. % mother, -25% yoy).
“Given the lack of sales and service tax (SST) exemption deliveries and the short operating month, we almost expected a soft April figure.
“Despite the soft April numbers, we remain positive about the sector as recent ground surveys point to a healthy waiting period across major brands, suggesting solid demand.” said the company.
A recent ground inspection at the Malaysian Auto Show 2023 showed that despite the lack of SST exemptions, auto dealers still received a healthy volume of orders, especially for new-launch models, the company said. .
“This is reflected in the waiting periods across the major brands (2-6 months for Perodua, 3-6 months for Toyota and 1-6 months for Honda).
“Usually there is no wait time for most Proton models, but some dealers have started taking orders for the X90 even before launch, and the recent launch of the X90 could boost Proton sales,” said RHB. IB said.
The investment bank has named UMW and Balmers Auto Bhd (BAuto) as frontrunners, saying UMW remains the favorite as it is the biggest beneficiary of strong orders for the Toyota Vios and Perodua Axia. Stated.
“We also like BAuto, whose sales of Mazda (led by local assembly of the CX-30), Kia and Peugeot continue to grow,” the company added. – Bernama
