SECTOR FOCUS OF THE DAY
Automobile Sector : Year-end bonanza Neutral
November TIV rose 5% MoM. The last two months of the year typically show a spike led by carmakers willing to offer steep discounts to rid of year-end inventory. Among them were Honda (+16% MoM), Toyota (9% MoM) and Nissan (+6% MoM). Perodua and Mazda saw flat MoM growth, while Proton saw a decline (-5% MoM). On a YoY basis, November results were flat. This is the fourth consecutive month of flat YoY growth as the performances of the mass-market names have come to either one of two extremes. Impact to the TIV from the YoY improvements in Honda (+18% YoY) and Toyota (+6% YoY) were offset by the double-digit YoY declines in Proton (-34% YoY) and Nissan (-30% YoY).
For the YTD period, the strongest recovery was seen in Honda (+22% YoY) and Toyota (+10% YoY). Nissan (-31% YoY) and Mazda (-24% YoY) were the biggest laggards, while growth for Proton and Perodua were flat.
We note two points of interest from November: 1) Mazda maintained sales of >1K for a second month with support from the new CX-5 launched in October. 2) Perodua only saw a 1% MoM growth as buyers waited for the new Myvi, which was only launched mid-November. It should see better numbers from December as deliveries for the Myvi are ramped up.
We maintain NEUTRAL on the automobile sector with BUYs on Bermaz Auto (BAuto) and Pecca Group, and HOLDs on DRB-Hicom, UMW Holdings, Tan Chong Motor Holdings, MBM Resources, Sime Darby and APM Automotive
Others :
Glove Sector : Attractive prospects, but lofty valuations Neutral
STOCKS ON RADAR
Mieco Chipboard, M-Mode, Latitude Tree Holdings, Century Logistics Holdings
NEWS HIGHLIGHTS
Hovid : Offerors say they can’t afford to raise offer price
Mieco : Optimistic about 2018 despite challenges
Vertice : To raise RM44mil via private placement
Pestech : Wins US$26mil job in Cambodia
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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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