Tuesday, October 24, 2017

FW: AmBank Research - Automobile Sector : A primer to 'new' =?us-ascii?Q?Sime_Darby NEUTRAL=2C__24_Oct_2017?=

 

 

SECTOR FOCUS OF THE DAY       

Automobile Sector : A primer to ‘new’ Sime Darby           NEUTRAL

 

Who are they? Sime Darby Bhd presently comprises five segments: plantation, property, motors, industrial and energy & utilities. The plantation and property units will be listed as their own entities by the end of the year (pure-play IPOs). The "new" Sime Darby will restructure the remaining business (or continuing operations) into three segments: motors, industrial and logistics & healthcare.

 

We note the following observations, given the information available at this stage: 1) Stripping out the property and plantation segments will streamline Sime Darby's structure to focus on the auto segment.  Auto will take centre stage and account for nearly 70% of revenue. 2) China and Malaysia will be the key markets to watch. While the auto business spans across 8 countries, the two accounted for 60% of the segment's revenue. 3) Margins will be tight and the logistics segment could change this.

 

What do they do? A closer look into the 3 core segments of "new" Sime Darby: 1)            Motors: All-in, Sime Darby Motors represents 29 brands that range from luxury (BMW, McLaren, Rolls Royce, Jaguar), mass market (Ford, Peugeot, Hyundai, KIA) to industrial vehicles (Hino, Volvo Trucks, Mack), and with a total of 130 outlets in 8 countries (Malaysia, Singapore, Thailand, Vietnam, China, Taiwan, Australia and New Zealand). The jewel of the crown is the BMW dealership, which it has held in some form since 1972. It is the second-largest BMW dealer globally after Abu Dhabi Motors.

 

Others :

BAT : Soft 3QFY17 earnings coupled with hazy outlook    SELL

 

 

STOCKS ON RADAR

Zhulian, Advancecon, Dufu Technology, Petron Malaysia Refining & Marketing                                 

 

 

ECONOMIC HIGHLIGHT

Japan : Election outcome clears uncertainty

 

 

NEWS HIGHLIGHTS

Rubber Gloves Sector : Top Glove said to buy Adventa’s surgical glove operations

Denko : To buy rival IMS

Globetronics : Cuts special dividend to conserve cash

Sedania : To raise up to RM7.5mil via private placement

 

 

 

DISCLAIMER:

The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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