Tuesday, October 24, 2017

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




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




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




Japan : Election outcome clears uncertainty




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





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