Automotive Sector
Perodua's March sales down by 11% y-o-y

According to a local media report, Perodua has recorded vehicle sales of 15,962 units in March (up 5.7% mo-m from February 2012's 15,097 units but down by 11.1% y-o-y versus March 2011's 17,948 units) based on the Malaysian Automotive Association's (MAA) latest statistics. Perodua's managing director Datuk Aminar Riashid Salleh has also commented that the Viva model was the worst hit with a 19% drop in sales to 12,812 units in 1Q12 (-19.1% y-o-y from 1Q11's 15,846 units).

The slower Perodua sales in March was in tandem with weaker total industry volume (TIV of 53,583 units in March, down 15.3% y-o-y), partly due to the newly implemented responsible lending guidelines by Bank Negara Malaysia. With Perodua's 1Q12 total sales volume of 44,743 units accounting for 24.7% of our  fullyear forecast, we are maintaining our CY12 sales volume projection for Perodua at 180.9k units (and TIV at 606.5k units).

No change to our FY12F net earnings projections of RM156.4m for MBM Resources (Buy, RM6.10 TP) and RM620.1m for UMW (Hold, RM7.30 TP), which owns effective equity stakes of 23.6% and 38.0% in Perodua, respectively.

Source: HwangDBS Research - 19 April 2012