Automobile Sector: Building back to the old normal Neutral

Oct 2018 TIV rose 51% MoM and was flat YoY at 47.3K units. The MoM spike compensated for the exceptional drop in Sep, when TIV fell to its worst monthly level seen in at least 7 years and in the aftermath of the “tax holiday”. Sales are slowly returning to their pre-tax holiday average of 45K/month with an average of 39K/month in the past two months, and the year-end promotions should provide a minimal boost in this strenuous environment. The MoM rebound was seen for all major players but the quantum was exceptional for Perodua (+106%) and Toyota (+58%) as they were the hardest hit in the preceding month.

YTD sales were 6% higher YoY as the tax holiday provided a significant lift. The three-month tax holiday accounted for 40% of YTD sales. We reiterate our belief that it would take at least 4 months for sales to normalize. Companies will likely be forced to rely on new launches or incentives to hold up sales in the coming months.

Others:

MISC: 9MFY18 earnings halved amid rising seasonal tailwind Hold

Sunway Construction: 9MFY18 net profit only grows 5% YoY Underweight

QUICK TAKE

Malakoff: Receives termination notice in Algeria Hold

RETAIL RESEARCH

Stocks On Radar: Kerjaya Prospek Group, Crest Builder, Lotte Chemical Titan, SLP Resources

NEWS HIGHLIGHTS

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Automobile Sector: France urges Renault to replace Ghosn, Nissan alliance faces strain

Source: AmInvest Research - 21 Nov 2018