PETALING JAYA: Automotive firm MBM Resources Bhd is expected to get an earnings boost with the launch of Perodua’s first energy-efficient vehicle, the Bezza.
Maybank Investment Bank Research (Maybank IB) in a report yesterday said the launch of the Bezza would revitalise MBM’s sluggish sales in the first half of 2016, which plunged 10% year-on-year to 97,700 units.
“MBM offers the highest exposure to Perodua’s Bezza from three angles – as a shareholder, car dealer and supplier of autoparts. “Having raised our Perodua vehicle sales forecasts, our 2016, 2017 and 2018 earnings forecasts for MBM are also lifted by 1%, 10% and 9% respectively,” it said.
The research house said it is raising its 2016, 2017 and 2018 sales forecasts for Perodua to 225,000 units, 250,000 units and 240,000 units respectively (from 220,000 units, 217,000 units and 205,000 units respectively).
According to Perodua’s website, MBM has a 20% stake in the national carmaker. Maybank IB also said Perodua will be enhancing its foothold in the economical car market with a Myvi replacement, potentially in mid-2017.
“For now, we expect Myvi sales to taper off to 5,000 units per month in 2017, from a peak of 7,500 units per month previously. “With the new Bezza, we believe that Perodua will be more aggressive in pushing for export sales to neighbouring countries which would further benefit Perodua’s auto parts vendors in terms of scale.”
MIDF Research meanwhile said MBM is almost entirely reliant on Perodua’s earnings to drive its bottomline. The research house said that Perodua is reported to be targeting initial sales of 10,000 units per month within the first three months of the Bezza launch, adding that the national car company expected sales to normalise at 7,600 units per month thereafter.
“Our channel checks suggest that Perodua has managed to garner bookings of 1,200 units so far. The normalised monthly sales target looks pretty aggressive considering that the Bezza’s main competitor, the Saga, only generates around 3,000 units to 3,500 units in monthly sales.”
The research house noted that Proton’s 1.3-litre Iriz, the company’s only model that has overlapping pricing with the Bezza, is only generating sales volume of around 500 units a month.
MIDF said fresh entry level buyers were unlikely to be significant, given the Bezza’s premium pricing.
“As such, we do not rule out cannibalisation of Perodua’s existing sales, particularly the ageing Myvi model.”
The research house added that with Proton scheduled to release the Persona and Saga replacements by end of the year, potential buyers may adopt a “wait-and-see” approach. -The Star