- We maintain our BUY on Sime Darby, based on a fair value of RM11.20/share – a 10% discount to our sum-of-parts value of RM12.45/share.

- Sime Darby Motors Sdn Bhd has opened its first showroom and sales centre for the distribution of the McLaren brand in Malaysia. Built at a cost of RM2mil, the showroom is located in Mutiara Damansara.

- The showroom is supported by the McLaren Kuala Lumpur Service Centre in Glenmarie, Shah Alam. This is Sime Darby’s third collaboration with McLaren Automotive, after Hong Kong and Shanghai.

- The flagship sales gallery, operated by its unit Sime Darby Auto Britannia Sdn Bhd will offer a range of high performance sports cars, including the McLaren P1, which is priced at over RM4mil (before tax).

- The McLaren P1 hybrid hypercar, which boasts 903 horsepower, is seen as the successor to the McLaren F1, with production limited to only 375 units globally.

- Targeted at the growing number of high-net worth individuals, the luxury offerings include MP4-12C Coupe and Spider models, which are priced at over RM2mil each (after tax).

- The motors division is the single largest contributor to the group’s topline, accounting for 35% and 37% of the overall revenue for FY12 and FY13 respectively. We expect that to continue over the next three years.

- At the operating profit level, it accounted for 14% each of the group’s EBIT in FY12 and FY13, third behind plantation (55% and 42%) and industrial (22% and 27%).

- For FY14F-FY16, we are projecting the motors division’s revenue growth of 9%-11% and an EBIT growth of 11%-15%, with margins at ~4%. We maintain our numbers.

Source: AmeSecurities