Posted by cricketlast > 2018-09-27 12:51 | Report Abuse

Hi victor,
they won't actually do that. Their objective is to consolidate their holdings in perodua. They will only proceed with mbmr if they know they can convince Med Bumikar to sell their 50.07% in MBMR If they were to buy from the open market, they will at max end up with 49.93% of MBMR. They would not be able to consolidate MBMR balance sheet, p&l and cash flow. And worst they would not have control over the company and end up as a minority.

Prevoius negotiation with Med Bumikar hit a roadblock due to the change of govt mainly due to the potential change of heads in Mara, the controlling shareholder of Med Bumikar. This was confirmed yesterday with the appointment of Hasnita Hashim as the new chairman.

That being said, i dont think UMW offer of 2.56 is valid anymore given the higher profit that perodua is expected to achieve in FY2018 onwards.

For me, if UMW do not want to increase the offer, Med Bumikar should reject it. With or without UMW, MBMR is still undervalue given its 22.6% holding in Perodua, leader of the automotive company in Malaysia.

Posted by Victor Yong > 2018-09-27 13:24 | Report Abuse

Author: HLInvest | Publish date: Wed, 26 Sep 2018, 09:03 AM

The implementation of SST 2.0 (vs. GST) has seen lower pricings for CKD vehicles but higher for CBU vehicles due to exemption on domestic sourced supply chain for CKD vehicles under SST 2.0. OEMs with high localised contents e.g. Proton (DRB) and Perodua (UMW & MBMR) are best positioned to benefit from SST 2.0. Nevertheless we expect overall TIV to take a dip post SST 2.0 implementation, with exceptions on OEMs with exciting new launches such as Proton (X70), Perodua (Axia facelift), Honda (HR-V facelift) and Mazda (CX-3 facelift) to support sales volume in 4Q18. Furthermore, weakening of RM/USD may drag OEMs with USD exposure (e.g. Toyota and Nissan) on higher input costs. We maintain our 2018 TIV assumption at 588.1k units (+2.0% YoY) for now and NEUTRAL rating on the sector. Our top picks are Pecca (BUY; TP: RM1.35), DRB-HICOM (BUY; TP: RM2.80) and MBM Resources (BUY; TP: RM3.04).

Posted by Victor Yong > 2018-09-27 13:26 | Report Abuse

MBM Resources (BUY; TP: RM3.04). vs umw's offer price 2.56

Posted by cricketlast > 2018-09-27 13:32 | Report Abuse

Yup.. Everyone including all the analysts that cover the company has a target price that is above umw's offer price.

Posted by Victor Yong > 2018-09-27 14:33 | Report Abuse

Maybe, raise a bit before Oct 31, :)

UMW says no plans to raise offer for MBM Resources, allocates RM600m for 3 core segments




Posted on 24 May 2018 - 10:08pm
Lee Weng Khuen
sunbiz@thesundaily.com


From left: Badrul Feisal, group chairman Tan Sri Hamad Kama Piah Che Othman, group COO/CFO Azmin Yusoff at the press conference after UMW Holdings' AGM today. The Sun/Zulfadhli Zaki
SHAH ALAM: UMW Holdings Bhd, which has no intention to raise its takeover offer price for MBM Resources Bhd, has budgeted RM600 million in capital expenditure (capex) for its three core segments after its full exit from the oil and gas business within the year.

Of that, RM200 million will be for the automotive and equipment segments each, RM100 million for manufacturing and engineering, and the remaining RM100 million for the aerospace expansion plan in Serendah, Selangor.

"On the Serendah land, we have a high value manufacturing plant there, so we try to expand in that area," UMW president and group CEO Badrul Feisal Abdul Rahim told a press conference after its AGM here today.

He believes the "worst is over" for the group, but it will take some time before reaching what it had achieved prior to 2014. "It will take time but definitely it will be in the black."

UMW's net profit jumped nearly four times to RM74.08 million for the first quarter ended March 31, 2018 against RM20.17 million in the previous corresponding period.

Badrul Feisal said the group's second new Toyota plant is expected to be completed by year-end and be operational early next year.

Automotive is the largest revenue contributor for UMW, but he cautioned that Toyota has been facing stiff competition, especially from Honda, despite new model launches this year.

Toyota car sales in Malaysia are estimated at 70,000 units this year, while Perodua is expected to sell 209,000 units.

With the replacement of the Goods and Services Tax by the Sales and Services Tax, Badrul Feisal said car prices will probably increase.

For the manufacturing and engineering segment, he revealed that the group plans to expand into medical device manufacturing.

UMW is unfazed by the review of mega projects in the country as a result of the change in the federal government, as 70% of its heavy equipment orders are derived from the overseas markets.

On the MBM bid, Badrul Feisal said UMW has not changed its mind on the offer price despite numerous rejections.

"We've extended the offer period. It's up to them to evaluate whether to sell or not. We still stick to the position (of not raising the offer price), until a time when it is suitable to address."

MBM has stood firm on not accepting the deal due to the "unreasonable" pricing of RM501 million or RM2.56 per share, despite major shareholder Med-Bumikar Mara Sdn Bhd reportedly expressing interest in disposing of the stake.

Last month, UMW Holdings Bhd extended its takeover offer period for MBM by six months, from April 30 till Oct 31. The jewel in MBM is its 22.58% stake in Perusahaan Otomobil Kedua Sdn Bhd (Perodua).

An extension was also given to PNB Equity Resource Corporation Sdn Bhd, which owns 10% of Perodua. UMW has yet to receive a response.

Posted by Victor Yong > 2018-09-27 15:36 | Report Abuse

EPF is dumping mbmr shares..its price is getting lower and lower . now, easier for umw to negotiate with mbmr, right? :)

EMPLOYEES PROVIDENT FUND BOARD 25-Sep-2018 Disposed 13,700 0.000 View Detail
EMPLOYEES PROVIDENT FUND BOARD 19-Sep-2018 Disposed 7,000 0.000 View Detail
EMPLOYEES PROVIDENT FUND BOARD 18-Sep-2018 Disposed 13,900 0.000 View Detail
EMPLOYEES PROVIDENT FUND BOARD 14-Sep-2018 Disposed 30,700 0.000 View Detail
EMPLOYEES PROVIDENT FUND BOARD 13-Sep-2018 Disposed 10,000 0.000 View Detail
EMPLOYEES PROVIDENT FUND BOARD 29-Aug-2018 Disposed 40,900 0.000 View Detail
EMPLOYEES PROVIDENT FUND BOARD 29-Aug-2018 Disposed 13,600 0.000 View Detail
EMPLOYEES PROVIDENT FUND BOARD 28-Aug-2018 Disposed 598,600 0.000 View Detail
EMPLOYEES PROVIDENT FUND BOARD 20-Aug-2018 Disposed 10,000 0.000 View Detail
EMPLOYEES PROVIDENT FUND BOARD 20-Aug-2018 Disposed 27,600 0.000 View Detail
EMPLOYEES PROVIDENT FUND BOARD 17-Aug-2018 Disposed 9,100 0.000 View Detail
EMPLOYEES PROVIDENT FUND BOARD 10-Aug-2018 Disposed 123,400 0.000 View Detail
EMPLOYEES PROVIDENT FUND BOARD 10-Aug-2018 Disposed 56,500 0.000 View Detail
EMPLOYEES PROVIDENT FUND BOARD 10-Aug-2018 Disposed 18,700 0.000 View Detail
EMPLOYEES PROVIDENT FUND BOARD 09-Aug-2018 Disposed 25,000 0.000 View Detail
EMPLOYEES PROVIDENT FUND BOARD 09-Aug-2018 Disposed 22,500 0.000 View Detail
EMPLOYEES PROVIDENT FUND BOARD 09-Aug-2018 Disposed 10,000 0.000 View Detail

Posted by cricketlast > 2018-09-27 16:15 | Report Abuse

Hi Victor,

Yes could be. Also noticed that EPF is also continuously buying UMW. So maybe they believe that a deal could be reach in the future.

However, i believe its safer for you to look at the company's fundamental first when deciding on whether to invest in a company or not. From my personal assessment, MBMR is currently trading at a very undemanding valuation of less than 7x PE with future profit growth intact. The average PE for other automotive companies is currently more than 15x PE (double to that of MBMR).

A deal with UMW for me is a bonus for investors to monetize their investment earlier. That being said it should only be done at a right price off course.

Posted by Victor Yong > 2018-09-27 16:38 | Report Abuse

Mbmr should buyback its own shares... Dividend yield is unattractive

Posted by Victor Yong > 2018-09-27 16:43 | Report Abuse

mbmr should buyback more shares so that existing shareholders could exit if they are unhappy with the low dividend yield for many years

Posted by cricketlast > 2018-09-27 17:17 | Report Abuse

Hi Victor,

Understand your dissatisfaction for the low dividend payment. But i think in the future they will be able to pay higher dividend.

The main reason to why they did not pay good dividend previously was because management believes its better to used the money to pay the debt first.

If you look at their annual or quarterly report, back in 2012 their total debt was at RM550mil with net debt (after deducting cash balance) at RM260mil. Net gearing was 16.7% (not that high actually).

As of June 2018, their debt is now at RM220mil with net debt at only RM40mil. Net gearing is only at 2.2%.

Please take note that for manufacturers in general (you could verify this with other listed manufacturers), they used debt for working capital in order to finance their inventories. So basically the short term debt is actually been backed by inventories and receivables (sales yet to be turned to cash).

For MBMR, the cash conversion cycle in 2017 was 42 days which is quite good for a manufacturer.

Basically, i also hope they will start paying more dividend in the future. If management can commit to a minimum payout ratio to investors, it would be a lot better especially for those investors that depends on dividend (EPF, PNB, Tabung Haji, Kwap etc). They might start to add more position in this company.

Posted by cricketlast > 2018-09-27 17:28 | Report Abuse

And victor,

They also needed the money for the alloy wheel manufacturing plant previously.

Now there is not much of capex needed apart from the RM12 mil for the expansion of the alloy wheel plant in order to increased the max capacity form 750k wheels to 1 mil unit per year.

The partnership with Citic Dicastal (China biggest alloy wheel manufacturer), will hopefully increase orders for the alloy wheel from only 300k units in FY17 to at least 700k units by FY19.

Posted by Victor Yong > 2018-09-27 17:44 | Report Abuse

interesting .... :)

Posted by Hafid > 2018-10-02 15:12 | Report Abuse

mbmr deal with umw cancel

Posted by yongch > 2018-10-02 19:00 | Report Abuse

Yes due to offer price too low n new suv was delayed worst part alloy wheels business deep losing in coming quater.....tp1.70!!!!!this time really jialat lo!!!!

Posted by Hafid > 2018-10-02 21:16 | Report Abuse

Better sell

Posted by cricketlast > 2018-10-03 07:02 | Report Abuse

Hi Yong,

Why did you say the alloy wheels business is going to have a big loss in coming quarters?

I actually believes that they are on track for a break even level in FY19 backed by increase export volume from their partnership with Citic Dicastal, China largest alloy wheel manufacturer as well as the new SUV launched by both Proton and Perodua.

The new SUV was delays to Feb 2019 instead of Dec 2018 was mainly for strategic marketing reason in anticipating for the launch of Proton's X70. Perodua do not want their marketing campaign to be diluted by the launch of the X70. However in term of market segments, these 2 SUVs are actually fall under different markets. The X70 is expected to be priced between RM98k to RM112k (https://www.zigwheels.my/new-cars/proton/x70) whereelse Perodua New SUV is expected to be priced at between RM70k to RM80k.

On the deal, if UMW sticks to their price of RM2.56, i think management should reject the offer. The next 2 quarters will show good growth vs last year's results mainly from the good results from Perodua. However, the deal actually depends mainly on Mara who since July has control over the board of Med Bumikar (holder of 50.07% of MBMR). They had just reappointed a new chairwoman and had changed most of the composition of the board members last week.

Deal or no deal, at the current price of RM2.04, MBMR is only valued at 6.6x PE (assuming FY18 PATAMI of RM120mil. 1H PATAMI is already at RM67.5m). Current average PE for other automotive players is above 15x.

Posted by Hafid > 2018-10-03 19:23 | Report Abuse

everyday down. look like not end

Posted by Saw CL > 2018-10-08 09:40 | Report Abuse

Recommended buy with tp of 3.40!

Posted by Hafid > 2018-10-08 11:09 | Report Abuse

any research

Posted by cricketlast > 2018-10-08 12:07 | Report Abuse

Hi Saw,

Yes. there is no denying that MBMR is currently trading at a very undemanding valuation of less than 7x 2018 PE compared to the industry average of 15x PE.

All 6 research house has a buy rating on the stock with an average TP of RM3.24 per share or 54% above the current share price of RM2.10.

Posted by Hafid > 2018-10-08 14:24 | Report Abuse

Market capitalization: 813.04
Dividend yield: 2.16
EPS(actual): -0.35
P/E Ratio(actual)NAP/E Ratio(estimate): 6.57

Posted by cricketlast > 2018-10-08 14:36 | Report Abuse

Hi hafid,

For 12 month trailing PAT, you need to take out all of the impairment occurred in 3Q and 4Q FY2017 which amounts to RM 253mil as this in non recurring, non operation and non cash in nature.

As indicated by the chairman during the AGM, there will be no more impairment planned going forward as most of the impairment were done in FY17 (mostly related to the Hirotako Holdings, Autoliv Hirotako and the alloy wheel businesses).

Excluding the impairments the total PATAMI for 3Q and 4Q 17 would be around RM50mil.
This translate to a 12 month trailing PATAMI of RM117.4mil or an EPS of 0.30 per share.

In terms of valuation , the 12 months trailing PE is 6.99x

Posted by cricketlast > 2018-10-12 09:08 | Report Abuse

The stock is currently oversold given the current price of 1.95. Which is the lowest since 2012 (7 years). The last time the stock traded at this price was way back in 2015 when the company recorded a Patami of RM8m and RM7m for 3Q15 and 4Q15 respectively. The low profit back then was mostly due to the statrt up loss of the alloy wheel manufacturing which this year has improve their operations substantially. The business is expected to be breakeven in FY19.

Profit for FY18 is expected to reach the RM120mil level. Which currently values the company at a mere 6.35x PE.

Posted by cricketlast > 2018-10-15 12:16 | Report Abuse

Another big potential for this company that analysts did not highlight is the market trend of Malaysian consumers in the automotive industries.

As shown by other global markets, the segment that currently have the biggest growth is the SUV segment. Malaysia's SUV penetration rate in 2017 was 11.5% but expected to grow to 20% in 2020 and to a further 30% by 2025.

Perodua (where MBMR holds 22.6% interest) will be one of the players that is expected to benefit from this shift of trend especially given that they are expected to price their new SUV (schedule to launch in Feb 2019) at a price range of between 70k -80k. This would mean that their SUV will be one of the cheapest (if not the cheapest) offering to the Malaysian consumers.

Their confidence in the SUV is shown by their decision to start with the production of the new SUV this month (as per originally schedule) even though launching will only be made in Feb. I believe this is a strategic decision made in order to make sure that any future demand of the SUV can be delivered on time to the customers.

Assuming SUV segment would command better margins, i would assume that the Perodua and MBMR indirectly (the alloy wheel for Perodua and Proton SUV will be supplied by MBMR) will post better profit in 2019.

Posted by Hafid > 2018-10-25 05:29 | Report Abuse

Anyway market is down. Dow drop

Posted by Hafid > 2018-10-30 07:33 | Report Abuse

any news from UMW on the MBMR. Look like the deal will be fail or further extension

Posted by cricketlast > 2018-10-30 14:51 | Report Abuse

Hi Hafid,

I think people are focusing too much on the RM2.56 offer by UMW back in March.

I believe investors got sidetracked a bit on what is really being offered when buying MBMR shares.

As mentioned in my previous posting, MBMR offers investors to buy into the Perodua business at a very low valuation of 6.6x PE (assuming RM120mil PAT in 2018). The only other way of having exposure to Perodua is by buying UMW shares but for me its a more expensive way as UMW is currently trading at 13.8x PE (assuming recurring PAT of RM400 mil in 2018).

The offer price made by UMW back in March was actually based on 9.5x 2017 PAT of RM440mil (Perodua full year profit in 2017) plus RM60mil for MBMR other businesses. If they are still interested they will need to increase the offer to reflect the higher profit expected from Perodua in Fy 2018 and FY 2019 (between 530mil to 600 mil).

Regards.

Posted by Hafid > 2018-10-30 16:34 | Report Abuse

the issue here is will UMW just walk out from the deal.

Posted by cricketlast > 2018-10-31 19:30 | Report Abuse

UMW had decided to let the offer to take MBMR private lapse. I don't think it is much of a suprise to many market players as most believed that the offer price was too low.

Now that the uncertainties associated to the deal has been lifted, hopefully market will evaluate MBMR based on its fundemental.

As it is, MBMR is the cheapest auto company in bursa at 6.5x PE compared to the industry average of 15x.

Future earnings growth will be driven by
1) the strong demand of the New Myvi (20,000 undelivered bookings as of sept)

2) the introduction of the cheapest SUV into the market schedule in Feb 2019 (due to high expected demand, Perodua had actually decided to start production of the new SUV in Oct)

3) turnaround of the alloy wheel manufacturing from the expected higher demand generated by the collaboration with Citic Dicastal to supply to the export market.

Posted by Hafid > 2018-11-01 05:57 | Report Abuse

Now can buy at bargain price

Posted by megatti_maf > 2018-11-01 06:05 | Report Abuse

I am a long MBMR because of its strong fundamentals and cheap valuation. Recent deal was a distration. Happy its already over. Haha

Posted by Hafid > 2018-11-01 07:08 | Report Abuse

PETALING JAYA: UMW Holdings Bhd
image: https://cdn.thestar.com.my/Themes/img/chart.png

’s bid to increase its stake in Perusahaan Otomobil Kedua Sdn Bhd (Perodua) has fallen through, with the offer expiring today.

UMW had offered to take over MBM Resources Bhd
image: https://cdn.thestar.com.my/Themes/img/chart.png

, which owns a direct 20% stake and an indirect interest of 2.5% through a joint venture with Daihatsu of Japan in Perodua, as well as buy Permodalan Nasional Bhd’s (PNB) 10% stake in the local carmaker.

Sources said all the parties involved have agreed to allow the deal to lapse.

UMW’s bid to increase its stake in Perodua started on March 9 this year when it made an offer to Med-Bumikar Mara to acquire its controlling 50.07% stake in MBM for RM501mil, or RM2.56 per share, as well as an offer to buy PNB’s 10% interest in Perodua at RM417.5mil, or RM29.80 apiece.

Completion of the deals would have raised UMW’s effective stake in Perodua to 70.6%.

UMW currently owns a 38% stake in Perodua.

On March 26, UMW announced that MBM had rejected its offer.

The deadline was then extended by another six months to Oct 31, 2018.
Read more at https://www.thestar.com.my/business/business-news/2018/10/31/umw-bid-for-bigger-stake-in-perodua-is-off/#4Xpk2JVLeVgUobPM.99

Posted by Hafid > 2018-11-01 08:50 | Report Abuse

2012 is RM1.69.

Posted by yongch > 2018-11-01 11:52 | Report Abuse

The deal oledy collapsed but still many ikan bilis still big dream ah!!!!go n sell before too late lo!!!!tp1.30!!!!!this is last chance warning lo!!!!low dividend low price !!!!hopeless lo!!!

Posted by cricketlast > 2018-11-02 08:29 | Report Abuse

The current PE multiple for MBMR is only 6.5x. The industry average is now trading at 15x PE.

There are 7 analysts covering MBMR at the moment with their target price ranging from RM3.04 to RM3.60 with the average being RM3.26.

Their profit target for 2018 ranges from RM109m to RM133m with the average being RM122m.

This values MBMR at around 10.4x PE which is still below the industry average.

Another alternative of valuing MBMR is by looking at the analyst reports of UMW. Most of the analysts use the Sum Of Parts methods in valuing UMW. From there we can look at what are the valuation given to Perodua and then apply the 22.6% (represent MBMR holding in Perodua) to the valuation.

There are 7 analysts that use the sum of part method in valuing UMW. They applied a PE multiple that ranges from 10x to 16x with the average being 12.8x PE. The analysts average PAT for Perodua is RM537mil which means MBMR PAT portion would be around RM121mil. This translate to an average MBMR target price of RM3.94 per share (RM121m x 12.8PE / 391mil shares).

As you can see in both cases (direct and indirect methods) MBMR current price is considerably undervalue.

Feel free to comment. Appreciate any inputs especially if i have missed out anything in my analysis.

Regards.

Posted by Hafid > 2018-11-03 11:30 | Report Abuse

1,500cc car got fuel rebate

Posted by Hafid > 2018-11-07 12:27 | Report Abuse

Short-term is rm2.40

Posted by shareinvestor88 > 2018-11-09 20:49 | Report Abuse

sell TP 1

Posted by apolloang > 2018-11-09 20:51 | Report Abuse

cannot 1.00 lah

Posted by shareinvestor88 > 2018-11-10 09:58 | Report Abuse

Sell TP 1.00 - 1.50

Posted by shareinvestor88 > 2018-11-11 23:46 | Report Abuse

Sell .... Tp 1.50

Posted by yongch > 2018-11-12 12:58 | Report Abuse

人家不收购，自己就自甘堕落，真的是没有的东西!!!!TP1.5!!!

Posted by cricketlast > 2018-11-13 17:14 | Report Abuse

The new planned petrol subsidy mechanism would be a positive development for Perodua and indirectly MBMR ( holds 22.6% of perodua). Lim Guan Eng mentionned that the subsidy mechanisms will take into account the engine capacity as well as the car model (i assume the model chosen will be based on the price of the car. Don't think anything above rm100k will be considered) . Given that perodua is the leader in the entry level market (via myvi, bezza and axia models), it is sure to benefit the company as customer now will have to consider the potential petrol subsidy in their decision on which car to buy.

http://www.theedgemarkets.com/article/guan-eng-luxury-cars-not-eligible-targeted-petrol-subsidy

At the price of rm1.93 per share the company is currently undervalued at 6.3x PE (2018 Target Pat of RM120m). Assuming a PAT of Rm135m in 2019 , this translate to a forward PE of only 5.7x.

3Q18 result is expected to be out by end of this month.

The average industry valuation is currently 15x PE.

Posted by BN_better > 2018-11-13 17:18 | Report Abuse

If petrol subsidy good why MBM drop everyday?

Posted by shareinvestor88 > 2018-11-15 00:08 | Report Abuse

Sell TP 1

Posted by cricketlast > 2018-11-15 05:22 | Report Abuse

The company is currently trading at the lowest level ever in the past 5 years. At 1.89 the company is currently valued at 6.0x PE. The average trading range for MBMR for the past 5 years was 10x PE. This represents an opportunity for investors to enter at a very low entry level.

The last time it was trading at this range, it was due to the underperformance of the Alloy Wheel division which resulted in operational losses as well as high impairment exercises. This is no longer the case as management had decided to make the full/ maximum impairment back in 4Q17. Starting this year, management has indicated there will be no more impairment planned. The alloy wheel business is also expected to be breakeven next year from the partnership with Citic Dicastal.


The immediate potential catalyst for the company would be the 3Q result expected to be out next week. 3Q17 PATAMI was only RM7.3mil. Expect the company to record a PATAMI in the range of RM20mil. It would have been a lot higher if it was not due to the Myvi supply disruption caused by one of their vendors. This issue has since been resolve which means there will be a lot more cars to be delivered in the current quarter thus a higher PATAMI which expected to range around RM40m.

Next year's growth will be driven by the still high demand of new Myvi and the entry level SUV (D38L) which is expected to be launch in Feb 2019. The new SUV is expected to be priced at between RM70k - RM 80k.

Posted by cricketlast > 2018-11-15 05:50 | Report Abuse

Another catalyst that i forget to mentioned is the disposal of the alloy wheel business. Management is looking to disposed of the business (inclusive of land and building ) at a valuation higher than the current book value.

Refer to the AGM Q&A minutes from the AGM back on 24th May 2018:

http://www.mbmr.com.my/Automotive/Investors/Minutes-of-General-Meetings/

I actually suspect that the potential buyer is Citic Dicastal (the leader in alloy wheel in China) since they are already collaborating with MBMR. The collaboration consist of MBMR manufacturing and exporting the alloy wheel (600k to 700k per year) to Citic Dicastal business in Europe.

Citic Dicastal is facing an anti dumping tariff imposed by EU since May 2018 until 2023. They need a manufacturing plant outside of China to escaped the tariff imposed by EU.

Posted by shareinvestor88 > 2018-11-15 07:47 | Report Abuse

Sell .... TP 1

Posted by cricketlast > 2018-11-15 09:26 | Report Abuse

A lot of people are worried that the stock might be effected due to the trade war and the increas of fed interest rate which would increase the cost of debts for companies.

But investors need to understand that MBMR focus mostly on the domestic market in particular the entry level market. I doubt it wold be effected by the trade war. U can see that a lot of commodities like aluminium has fallen since the trump imposed the tariff on china. This actually helps mbmr as it will reduce the cost of its production (the alloy wheel for example)

In terms of debt, the company has actually very low net debt level with debt mainly used for trading purposed. This means the debt are directly back by trade receivable and inventories. With a company having a fast turnaround on most of the inventories, this is actually not too much a concern.

If u think malaysia economy will slow down. Please used mcdonalds as a reference to what happenn in 2007-2009. Given the nature of perodua products being in the entry market level, a lot of people will actually opt for a cheaper but relible option when buying new cars. This is what happen to Mcdonalds where a lot of people opted to go to mcdonald for their meals instead of other restaurants as it is more cost saving.

Posted by shareinvestor88 > 2018-11-16 23:10 | Report Abuse

Sell TP 1.00