What happened?
Malaysian Automotive Association released their latest data on car sales in Malaysia.
February TIV drop 1% Y/Y to 62,833 units. This is the first drop after seven straight growth Y/Y.
What I think?
1. This is a negative news to all auto related stocks including APM.
2. 2024 should grow but at lower than earlier anticipated.
3. Long-term outlook remains good. Malaysian just love cars, each year add at least 600,000 cars on the road. APM should benefit from this trend.
4. The new intrinsic value is RM3.00. I am using PE of 10x now as the growth should slow down. Given the estimated 2024 EPS of 30 sen, this calculation results in a value of RM3.00.
5. My thinking is if this trend of drop Y/Y could sustain for at least 3 months. Higher electricity bill and potential increase in fuel price in 2nd half of 2024 should make people think twice before purchasing cars. This eventually will affect demand for spare parts which is APM product.
Created by KingKKK | Apr 04, 2024
Created by KingKKK | Mar 31, 2024