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KLSE: MBMR       MBM RESOURCES BHD
Last Price Avg Target Price   Upside/Downside Price Call
2.12 3.21     +1.09 (51.42%)
* Average Target Price, Price Call and Upside/Downside are derived from Price Targets in the past 6 months.
** Price Targets are adjusted for Bonus Issue, Shares Split & Shares Consolidation (where applicable).
Date Open Price Target Price Upside/Downside Price Call Source News
23/11/2018 2.04 3.20 +1.16 (56.86%) BUY MIDF Price Target News
23/11/2018 2.04 3.60 +1.56 (76.47%) BUY KENANGA Price Target News
23/11/2018 2.04 3.13 +1.09 (53.43%) BUY HLG Price Target News
23/11/2018 2.04 3.42 +1.38 (67.65%) BUY AmInvest Price Target News
23/11/2018 2.04 3.27 +1.23 (60.29%) BUY Affin Hwang Capital Price Target News
17/10/2018 2.12 3.04 +0.92 (43.40%) BUY HLG Price Target News
08/10/2018 2.10 3.40 +1.30 (61.90%) BUY Rakuten Price Target News
30/08/2018 2.32 3.04 +0.72 (31.03%) BUY HLG Price Target News
30/08/2018 2.32 3.09 +0.77 (33.19%) BUY AmInvest Price Target News
29/08/2018 2.34 3.20 +0.86 (36.75%) BUY MIDF Price Target News
29/08/2018 2.34 3.60 +1.26 (53.85%) BUY KENANGA Price Target News
29/08/2018 2.34 3.04 +0.70 (29.91%) BUY HLG Price Target News
29/08/2018 2.34 3.11 +0.77 (32.91%) BUY AmInvest Price Target News
29/08/2018 2.34 3.27 +0.93 (39.74%) BUY Affin Hwang Capital Price Target News
13/07/2018 2.40 2.87 +0.47 (19.58%) BUY AmInvest Price Target News
02/07/2018 2.38 2.87 +0.49 (20.59%) BUY AmInvest Price Target News


Price Target Research Article/News (past 6 months)
23/11/2018  MIDF MBM Resources - Deep Value Amid Earnings Outperformance
23/11/2018  KENANGA MBM Resources - 9M18 Within Our Expectation
23/11/2018  HLG MBM Resources - Speeding up
23/11/2018  AmInvest MBM Resources - Efficiency gains from OMI
23/11/2018  Affin Hwang Capital MBM Resources - a Strong Quarter,attractive Valuations
17/10/2018  HLG Automotive - Sep: Down Due to SST Reintroduction
08/10/2018  Rakuten MBM Resources Bhd - Motoring Brighter Move
30/08/2018  HLG MBM Resources - Gearing Up for the Future
30/08/2018  AmInvest MBM Resources - Plans for alloy wheel intact
29/08/2018  MIDF MBM Resources - Solid 2Q18
29/08/2018  KENANGA MBM Resources Bhd - 1H18 Above Expectations
29/08/2018  HLG MBM Resources - Building a Strong FY18
29/08/2018  AmInvest MBM Resources - Strong car sales and OMI efficiency gains
29/08/2018  Affin Hwang Capital MBM Resources - Strong Earnings, Maintain BUY
13/07/2018  AmInvest MBM Resources - Big ambitions for alloy wheel unit
02/07/2018  AmInvest MBM Resources - Leadership change



  leno likes this.
 
PotentialGhost Useless that price would not up , because we are in boleh land . We live together with monyet .
23/11/2018 00:39
chamlo 4.5 sen dividend 1 year is issue to EPF?
23/11/2018 05:32
megatti_maf Wow maybank TP rm4.18
23/11/2018 09:20
commonsense Results are above expectation.

4Q results should be better supported by the 22,000 new myvi orders that has yet to be delivered as of september. I am also anticipating that most of the 47,273 cars sold in october will actually Perodua and Proton (since they are the only company that is still absorbing the SST). The breakdown of sales by brand should be available by next week.

Those interested in investing into this company should focus mainly on Perodua performance as that is actually the determinant of the profit to MBMR (the other businesses such as auto parts manufacturing and car dealership actually does not contribute much to the bottom line).

Current valuation is the cheapest for the automotive industry (around 5x PE). Anyway, it is a lot cheaper than what UMW is currently trading (UMW holds 38% or Perodua, which provides investors another alternative to get exposure to Perodua).
23/11/2018 10:27
Alfred Boon Huat Sold at 1.930, stupid...keep dropping
23/11/2018 14:56
Alfred Boon Huat Sold at 1.960, keep dropping, no eye see.
.
23/11/2018 15:20
dompeilee I regretted not re-entering after the results released last evening...now I don't regret selling @ 2.48-2.50 in March on the premise that UMW could not afford to takeover MBMR :) :-

dompeilee Bought some MBMR @ 2.05...Gonna b sizzling hot soon !:

16/10/2017 16:04

.....SOLD 1/2 @ 2.48-2.50!!! :D
12/03/2018 09:18
23/11/2018 17:11
Chenmr123 Good movement shown, market may take a correction once opened again. Be careful, you can reenter but after wait for first few hours.
For live market update & picks whp (601157940369) to get proper analysis on fundamentals & latest reports
24/11/2018 11:40
James Ng https://klse.i3investor.com/blogs/general/183676.jsp
[转贴] [MBM RESOURCES BHD:受益于2018年8月31日结束的商品及服务税的税收假期] - James的股票投资James Share Investing
26/11/2018 09:01
commonsense I can't highlight enough that this counter is the most attractive counter in Bursa in terms of its low valuation and also the profit growth that it offers. The company holds a 22.6% interest in Perodua. Another listed company with exposure to Perodua is UMW.

At a target PATAMI of RM145mil in FY 18, PE valuation is still only 5.3x PE.

The profit is also expected to grow in FY19 backed by the still high demand of the new Myvi (22k firm orders yet to be delivered as of Sept 18) and also the new SUV which will provide a new range of customer based. This is because the SUV price of RM70k to RM80k does not coincide with any other Perodua products (currently the higher price vehicle for Perodua is Alza at RM63k). So those that are interested in the new SUV will most probably be new segment of customers. Production for the SUV has started in October.

Other positive catalyst for the MBMR would be:

The breakeven (or even profit) of alloy wheel manufacturing division (expected to sign an export agreement with Citic Dicastal by this quarter). New Myvi and New SUV are both using MBMR's alloy wheel.

Higher demand orders from Proton for the auto component division especially for the new X70 which is expected to be manufacture locally next year. Management is still in negotiation with Proton's representative.

For FY 19, I am targeting a PATAMI of RM160mil. Which at the current price only values MBMR at 4.8x forward PE.

PB is only 0.5x BV with cash balance of RM 222.5mil.

Free cash flow is positive and expected to increase further.
27/11/2018 10:46
commonsense Perodua car sales in October this year was 19,528 cars which is a 106% increment compared to September sales (which had production issue for Myvi).

The sales number is also higher by 18.4% compared to Oct 2017 sales of 16,491 cars. If the same trend continues for Nov and Dec, we should expect that MBMR to post a PATAMI of above RM40mil for 4Q18. This will bring the profit to around RM145mil for 2018. At current valuation that is only 5.2x PE.

The company is also expected to finalised on the export deal with Citic Dicastal soon which will increased the production rate of the alloy wheel division.
29/11/2018 10:19
lazycat how come the stock price won't go up given the latest 3 quarter good results.. sigh
03/12/2018 17:08
lazycat commonsense tenkiu for promote mbmr..
05/12/2018 16:14
Hafid Still small gain only. Hopefully back to 2.60 level at least
05/12/2018 19:04
lazycat hi everyone , want go for a ride? :p
06/12/2018 10:01
megatti_maf awesome counter. May more and more retail and institutional investors get notice of this cheap valuation growth company.
06/12/2018 12:14
KiasiPu UMW trigger the buying MBMR again?
06/12/2018 14:52
yongch Yes...good news! Tp2.80!!!!now both party restarts negotiating....
06/12/2018 15:44
azharhassan78 game started.
06/12/2018 21:08
KiasiPu yongch, where is the news?
07/12/2018 10:53
pharker Dun simply spread false rumours....1st say price will go down tp 1.50 so ppl sell u buy cheap..then dah beli spread false rumours say UMW start renegotiating...tak elok mcm ni....we are here to help each other..not to send each other to holland...alhamdulillah
07/12/2018 12:15
commonsense Hi Kiasipu,

Rather than focusing on speculative news, better we look at the company's fundamental. Given the current market condition, most of the companies in Bursa had actually posted profit that was below the expectation of investors (and most actually posted losses rather than profit). Based on CIMB study's only 11% of listed company posted above expectation results.

MBMR is one of those companies. Just to recap (apologise for repeating), the company is currently the most under value company in the Auto segment even though it has a direct exposure to the market leader which is Perodua. Exposure is via the 22.6% interest in Perodua.

Based on a target PATAMI of RM145mil for FY18 (9 months Patami is already RM105.5mil), the company is currently only valued at 5.9x PE and a PB of only 0.6x. The industry average (you have to take out MBMR off course) is around 15x PE.

4Q18 will be higher than 3Q18 and 4Q17 result. Just look at the Perodua car sold in October (19,528 cars vs 16,491 on Oct 17). And remember as at end of Sept, there were still more than 22,000 firm orders of new myvi yet to be deliver. Management is actually expediting this in order to clear them before end of 1Q19 (which also mean 1Q19 most probably be higher than 1Q18).

Now if you roll the profit into FY19, which i'm targeting something around RM160mil PATAMI, the valuation would fall further to only 5.3x PE. The growth will mainly comes from still high demand of new myvi, launch of the entry level Perodua SUV in 1Q19 and also the turnaround of the alloy wheel division driven by higher export market (in collaboration with Citic Dicastal, China largest alloy wheel manufacturer).

In terms of balance sheet, the company is currently at a net cash position and free cash flow are only expected to increase further (management has indicated lower capex spending going forward). The debts are mostly for trading purposes which means it is backed by the inventories and receivables.

Hope that would provide you more confidence in the company's fundamental (rather than focusing on speculative news).

Good luck.
07/12/2018 12:51
pharker A very good analysis..commonsense

Thank you
07/12/2018 14:35
ciaksai Tax holiday(0% GST) ended in Aug'18. Last QR good QR won't repeat .
07/12/2018 16:30
ciaksai 3rd national car coming will kill MBM.
07/12/2018 16:30
ciaksai New car is not necessity. People can turn to 2nd hand car or even motor-bike to cut cost.
07/12/2018 16:31
ciaksai EPF smart. After selling just stay away knowing good QR won't repeat.
07/12/2018 16:34
ciaksai RM 100 unlimited train pass and RM 50 for bus starting 1st Jan 2019 will further reduce car sales.
07/12/2018 16:36
shareinvestor88 SELL TP 1
08/12/2018 11:16
commonsense Hi ciaksai,

Here is my views on some of your concerns:

1) Tax holiday period has ended. Car sales will go down. Results will start to go down.

Perodua car sales has actually increased in October this year compared to 2017 (19,528 cars vs 16,491 on Oct 17). In 3Q18 MBMR recorded a PATAMI of RM38.1 mil which is the highest quarter since at least FY2015. This was achieved even when Perodua faces with a production disruption of the new myvi in August and September (sales of myvi was low for 3Q18 at only 11,000 vs 1Q & 2Q average of 23,000 units). Production has normalised since early October. 4Q18 is expected to be higher vs 3Q18 due to management commitment to deliver and clear the 22,000 back log of new myvi that was effected by the disruption in Aug and Sept. In addition, given the normalation of production, average Perodua car sales in 4Q is expected to be higher than 3Q (October numbers has proven that). Growth in FY19 will be driven by still high demand of new Myvi and new Perodua SUV.

2) 3rd national car will effect MBMR business outlook.

Given that MBMR is actually one of the biggest auto component manufacturer (if not the biggest), MBMR could actually benefit from the increase of local car production in Malaysia. The company is the market leader in the manufacturing of steel and alloy wheels, auto safety products (seat belts, air bags and steering wheels) and noise, vibration & harness products (insulator, dampening sheets, headliners etc).

However, i have my doubts on the 3rd national car project. I think the only person that really wanted the project is our PM, Tun M. The others are just being accommodative to his request. Their target is to roll out production by 2021. From the conception of a car to production will actually need a lot of capital and time. Tun M is expected to step down and pave way to Dato Seri Anwar in 2020. I just don't see Anwar wanting another Proton in his first tenure as the new PM.

I think it would be wise to wait and see the development of the said project before we include it in any investment analysis. We might be jumping the gun on this.

3) New car is not necessity. Buy second hand or buy motor cycles.

I just think most Malaysian just prefer buying new products rather than used one. Until that mindset changes i would still think that people would prefer new cars vs second hand.

I have seldom heard (actually almost never) of people selling their cars to convert to motorcycles. Most of the time its the other way around.

But i get your argument that given the current economic condition car sales might get effected (in the case of MBMR case, we are worried that Perodua sales will go down since its the main profit contributor to the group). I have actually a thesis of my own on this. I believe in a difficult economic condition, Perodua sales might actually do better vs other brands. The reason is that instead of people ditching their cars for motorcycles (as per what you suggested), people would actually opt to a cheaper brand of a car (as they will still prefer cars as a mode of transportation). So most of them who are trying to cut cost will actually opt to buy Perodua rather than foreign made car for example. During the most recent financial meltdown of 2007 to 2009, sales and profit of Mcdonalds actually went up in the US. The reason is that people decided to stop going to expensive restaurant and opt to eat out at Mcdonald instead because it is way cheaper.

With the new petrol subsidy mechanism to be introduce in 1Q19, Perodua will actually be one of the main beneficiary. Even most of Proton cars are not entitle to the subsidy as most of them has an engine size of 1,600 cc. Subsidies will only be given to certain car models that have engine size smaller than 1,500cc.

4) Unlimited train and bus passes will reduce future car sales.

I have my doubts on this mainly given the network coverage of our transportation system. Unless u are already living at the center of KL where the network and availability of public transport are better, then i think you will still need a car. For Perodua customers in particular, i think most of them actually lives outside of the city center.

Given the government objective to reduce expenses, i dont think our public transportation system will improve anytime soon. You can refer to the government decision to delay or put on hold some of the projects ( LRT3, MRT, HSR etc).

Hope these can allay some of the concerns that you have.

Regards.
09/12/2018 07:57
shareinvestor88 SELL TP 1
09/12/2018 21:02
sell Q4 is seasonal weak qtr. Q4 2017 MBM even suffer loss. Better take profit.
https://klse.i3investor.com/servlets/stk/fin/5983.jsp
09/12/2018 22:12
shareinvestor88 Sell tp 1
11/12/2018 10:40
sell EMPLOYEES PROVIDENT FUND BOARD (a substantial shareholder) disposed 500,700 shares on 06-Dec-2018.
12/12/2018 02:34
sell Even EPF run. Below RM 2 likely agsin.
12/12/2018 02:34
commonsense Hi Sell,

Previously MBMR posted lower 4Q results is not due to weaker operation performance. Actually, in general core profit are mostly higher during the quarter when compared to others. The main reason for the lower performance in 4Q previously was due to management decision to perform impairment or writeoff exercise of its investment at the end of the year (RM20mil in FY15, RM34mil in FY16 and RM245mil in FY17). Most of these impairment/writeoff are for the company's investment in Hirotako (safety equipment division) and its alloy wheel manufacturing business. If you were to exclude the impairment, PAT would have mostly been higher in 4Q compared to 1, 2 or 3Q.

In 4Q17, management had decided to fully impair all of its investment in Hirotako and the alloy wheel businesses which is why the impairment amount for last year was so high at RM245mil. Management has also indicated that there would be no more impairment plan for FY19. In addition to that, October 2018 sales was 18.4% higher compared to last year which is why i am confident that 4Q18 result would be better than 4Q17 and 3Q18. So you will see a growth in profit for QoQ and YoY.

I also think that investors should invest based on the fundamental of a company instead of following what other investors are doing. If you were to based your investment decisions on what EPF sells or buys then you might be a bit confuse on their decision to buy and sell UMW share on the same day for example. Or their decision to increase exposure in Armada in Nov (at price of around rm0.40) to only dispose off it as early as Dec (at price below RM0.20). It would be better for investors to focus on the fundamentals of a company rather than focusing too much on what other people are doing. Those that decides to follow Tabung Haji decisions might not be too happy now. You can follow but need to do your own analysis of the company first.

EPF decision to buy and sell on the same day:
http://www.bursamalaysia.com/market/listed-companies/company-announcements/5999581

EPF Armada movement:
https://klse.i3investor.com/servlets/stk/annchsh/5210.jsp

On your target price of RM1, it would mean that you are valuing MBMR at a mere 2.7x PE and 0.3x BV. I don't think it's logical to value a company with presence in Perodua at a very low multiple given the industry average of 15x PE.

Based on your other comments in i3, i think you are actually a bit pessimistic on investing in equity in particular in Bursa at the moment. Out of curiosity, where do you think would be the best place for investors to put their money into at the current market condition?

Regards.
12/12/2018 07:15
antoniomc27 commonsense, thanks for your thoughful analysis day after day vs. those just spreading bearish sentiment to get some trading profits.
12/12/2018 17:45
megatti_maf Affin Hwang raises target price for MBM Resources to RM3.70

TheEdge Fri, Dec 14, 2018 - 2 hours ago

KUALA LUMPUR (Dec 14): Affin Hwang Capital Research has maintained “ Buy” on MBM Resources Bhd at RM2.12 with a higher target price of RM3.70 (from RM3.27) and said moving on from the failed takeover attempt by UMW Holdings, MBM Resources (MBM) will focus on: (i) reducing losses from its alloy wheel business and (ii) improving its financial position.

In a note today, the research house said in view of Perodua’s strong product line-up and positive consumer sentiment, it expects Perodua to deliver robust sales in 2019, thereby driving MBM’s associates’ earnings growth.

“We raise our EPS forecast by 14% for 2019-20E, and maintain our Buy with a higher target price of RM3.70 (from RM3.27).

“At 6x 2019E PER, MBM’s valuation is compelling,” it said.

http://www.theedgemarkets.com/article/affin-hwang-raises-target-price-mbm-resources-rm370
.......................
14/12/2018 11:12
EPF_sell Affin also give Armada TP 55 sen what happen now?
14/12/2018 11:43
EPF_sell 13-Dec-2018 Insider EMPLOYEES PROVIDENT FUND BOARD (a substantial shareholder) disposed 512,800 shares on 10-Dec-2018.
https://klse.i3investor.com/servlets/forum/800001115.jsp
14/12/2018 11:43
EPF_sell i3 forumers chase let EPF sell more.
14/12/2018 11:44
thinINVEST @commonsense is bound to make loss in his MBMR investment. because the good sales during tax holiday just wont repeat again. remember the news saying sales during tax holiday in 3 months is actually the sales in a year previously. during tax holiday the perodua cars are cheaper 10-20k . its a huge discount. its not like clothes and other things where tax holiday only reduce a few ringgit. keep on living in ur dream that car sales will increase?? well, i can only say, i wish ur dream come true
15/12/2018 08:49
thinINVEST if @commonsense go to debate competition, he can actually be champion, because of his debating skills.
15/12/2018 08:50
signalmw 受到中國與歐元區經濟表現不如預期的影響,加劇市場對全球經濟增長的疑慮,拖累美國股市周五(14日)盤中重挫,美股3大指數全面下滑,道瓊工業指數更重挫496點,收在5月以來最低點。
15/12/2018 09:31
commonsense Hi thinInvest,

Actually during the tax holiday, Perodua sales did not do that well compared to other auto companies. But its not because there was no demand, but its actually due to the New Myvi production issues. Production has already normalise since early October.

So during the 3Q (July to Sept period), sales of Myvi actually dropped from average of 23k cars in 1Q18 and 2Q18 to only 11k sales in 3Q . That being said MBMR still managed to record a PATAMI of RM38.1mil (mainly from contribution of Perodua share of profit).

For 4Q the reason i am confident that it can show profit growth is due to Perodua's October car sales numbers. They managed to sell 19,528 cars vs 16,491 on Oct 17. It is also higher than the August 18 cars sales number of 17,804 (which is the last month of tax free holiday).

This is where Perodua differs from other auto companies where mostly saw falling sales post tax holiday period.

All this numbers are all public info that you can get from the Malaysian Automotive Association (MAA).

It's hard to find profitable companies that can provide profit growth and still trading at low valuation at the moment. Most of the good ones are already trading at a premium vs their peers. In some cases the whole industry (like gloves industry) are trading at premium.

I actually like MBMR not just because of its financial performance but also due to its business positioning.

1) Its a proxy to a strong brand (Perodua which is the market leader in its industry)
2) Domestic focus market (not effected by the current trade war uncertainty)
3) Limited client concentration risks
4) Entry level market focus. Even the new SUV is expected to only be price at RM70k-80k. In challenging economy most people will still need cars to move around in Malaysia. It just that some might decide to buy a cheaper brand. As mentioned before, please use Mcdonald performance during the 2007-2009 crisis as reference. Sales and profit of the company actually went up during the recession due to most people preference to go to their cheaper fast food chain vs to going to more expensive restaurant.
5) Strong balance sheet. Currently MBMR is in a net cash position. So there would be limited risk of being pressured due to higher interest rate trends.
6) Potential financial growth in 2019 (hard to find a lot of companies being able to deliver this at the moment). Growth to be driven by still high demand of new myvi (as of sept there was still 22k firm order of myvi yet to be deliver) and the new SUV. The new SUV will actually create a new customer segment as previously Perodua customers ranges from those with RM20k to RM65k budget for a new car. Now the SUV will carve out a new customer segment of RM70k to RM80k for Perodua. Hence potentially will increase Perodua car sales numbers even further and boost its revenue and profit.

Just out of curiosity. Given the current market condition, where do you think is the best place to put your money into? Are you still invested in Equity?

Regards and best of luck.
15/12/2018 12:38
Darth_ 14-Dec-2018 Insider EMPLOYEES PROVIDENT FUND BOARD (a substantial shareholder) disposed 207,400 shares on 11-Dec-2018.
13-Dec-2018 Insider EMPLOYEES PROVIDENT FUND BOARD (a substantial shareholder) disposed 512,800 shares on 10-Dec-2018.
12-Dec-2018 Blog Automobile - Riding a low tide
12-Dec-2018 Insider EMPLOYEES PROVIDENT FUND BOARD (a substantial shareholder) disposed 852,000 shares on 07-Dec-2018.
11-Dec-2018 Insider EMPLOYEES PROVIDENT FUND BOARD (a substantial shareholder) disposed 500,700 shares on 06-Dec-2018.
https://klse.i3investor.com/servlets/forum/800001115.jsp
15/12/2018 12:41
Darth_ EPF in trouble or MBM in trouble behind EPF disposals?
15/12/2018 12:42
lazycat epf holding 15% , their shares could be bought 20 years ago at 20cents a share
15/12/2018 12:50
Jaya And then you might convince me
16/12/2018 01:41
Jaya Commonsense
You must be a sale rep for this company, cannot sell cars so they put you in here to promote share price and keep you out of their way
Please change vocation la
16/12/2018 01:48


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