AmBank Research has maintained a buy call on MBM Resources Bhd (MBMR) with a lower fair value of RM4.32, based on an unchanged 9x FY21 EPS.
“We expect MBMR to record a stellar recovery in 2H20, empowered by the implementation of the sales and service tax (SST) holiday from 18 June till 31 December 2020. Our buy call is also premised on the belief that Perodua cars would recover more quickly compared to other brands due to its more attractive pricing for its model line-ups and value propositions,” it said.
However, the research house cut its FY20–21 net profit forecast by 6% and 7% respectively to account for the delay in the launching of a key model – which is the Perodua D55L 5-seater sport utility vehicle (SUV).
The research house shared that the launch of the unnamed Perodua D55L 5-seater SUV will be delayed to the second quarter of 2021. There were reports that the SUV was supposed to have made its debut this year. The D55L was expected to be a close relative of the Daihatsu Rocky/Toyota Raize twins, both of which went on sale in Japan in November 2019.
“We believe that Perodua is likely to set a lower price point for the model compared to the Proton X50.
“The group reiterated that it will be retaining its dividend payout policy of 60% on company level for FY20 amidst the pandemic. Based on our projections, this will translate into FY20–21 dividend per share of 14.7–19.2 sen and dividend yields of 4.6–6%,” it added.
The research house said Perodua has ramped up its monthly production volume to about 25,000 per month to cater for the uptick in demand for its vehicles due to the SST holiday.
“We gather from various news reports that Perodua sold a total of 21,300 units and 23,200 units of vehicles for June and July 2020 respectively. We note that Perodua sold an average of 20,000 units/month in 2019,” it added.