Firing On All Cylinders

MBM Resources is powering up, say analysts

RESEARCH analysts are bullish about MBM Resources Bhd’s (MBM) expansion plans to become a complete automotive group with capabilities that include manufacturing and assembly, distribution, retail and dealerships, parts and accessories, and body and paint repair.

In a report, Kenanga Research says it continues to view MBM’s prospects positively.

The research unit notes that MBM is shifting its focus to manufacturing as the group plans to grow its earnings for its manufacturing division to make up 36% of the group total earnings, from about 15% currently.

“We also see more potential orders for its airbags sales, given the low average airbag fitment rate of 50% to 70% for local cars.”

OSK Research also says MBM is morphing into an integrated automotive player with exposure across broad segments and various supply chains in the sector.

OSK Research reiterates that automotive safety equipment manufacturer Hirotako Holdings Bhd, which was recently acquired by MBM, could contribute up to RM42mil to the group’s profit this year.

OSK Research points out that airbag maker Hirotako will benefit from the compulsory fitment of airbags for all new vehicles this year.

“Also, we understand that MBM is inking a deal to supply airbags for the Toyota Vios this year.”

OSK Research says airbag maker Hirotako will benefit from the compulsory fitment of airbags for all
new vehicles this year.

OSK Research points out that Hirotako’s joint venture partner was Autoliv, known as the biggest supplier of airbags globally with Volkswagen as its biggest customer.

“We see both parties sealing a deal here eventually, since Volkswagen will soon start localising production. Also, in the longer term, opportunities are abound for MBM to cross-sell its airbags to Daihatsu Indonesia.”

RHB Research Institute points out that Hirotako is the sole manufacturer of airbags in Malaysia, and estimates that the company could grow its 2011 to 2014 net profit at a 13.3% compound annual growth rate (CAGR).

“This year, Hirotako’s earnings will be driven by the full 12-month contribution from the supply of safety equipment for the new Myvi, in addition to Proton’s forthcoming Persona replacement,” says RHB Research.

Meanwhile, Kenanga Research points out that the group’s 78%-owned subsidiary Oriental Metal Industries (M) Sdn Bhd (OMI) would have a new RM103mil alloy wheel manufacturing plant in Rawang, which is expected to be commissioned by the end of the year.

“This plant will have an annual production capacity of one million alloy wheels, which will be used to fulfil the demand gap in the alloy wheel segment as about 44% of the alloy wheels in the country are imported. We expect an additional RM150mil in annual turnover to MBM when the facility is fully operational in 2015.”

It is also notes that MBM has a manufacturing licence for the assembly of motor vehicles after acquiring a 70.1% stake in Kinabalu Motor Assembly Sdn Bhd from the Lion Group two years ago.

“Although details still remain sketchy, the licence acquired is a general licence which entitles MBM to assemble passenger cars or commercial vehicles. This is better than new licences, which only allow for the assembly of cars higher than 1.8-litre and priced above RM150,000.”

RHB Research believes a vehicle assembly plant set up by MBM would be best served by being located in close proximity to the Klang Valley.

“While MBM intends to leverage on the manufacturing licence, any potential investment opportunity would depend on the outcome of the forthcoming revision to the National Automotive Policy that is expected to be announced in April,” says RHB Research.

RHB Research also says the completion of the 26-storey Menara MBM, located on the former Federal Auto showroom site adjacent to Mid Valley Megamall is on track, could add RM20mil to the group’s earnings in 2014.

“The construction of the building by 70%-owned subsidiary Inai Benua is on track. MBM plans to keep seven floors for its own use while 70% of the remainder has been sold.”

Results within expectations

Meanwhile, analysts say MBM’s earnings for the financial year ended Dec 31, 2011 were within estimates.

For the 12 months under review, MBM posted a 15% year-on-year drop in net profit to RM120.9mil, which was attributed to higher expenses incurred from the group’s expansion, lower margins from the discontinuation of the Daihatsu Delta trucks, higher material costs, adjustment of a once-off gain in 2010 as well as manufacturing deliveries affected by the disruption in parts supply, as a result of the Japan earthquake and Thailand flood disasters last year.

Revenue for the year under review increased 14.6% to RM1.75bil, on the back of strong sales of new Volkswagen models by the Federal Auto Group as well as Perodua cars by the dealership network of DMM Sales (M) Sdn Bhd.

For its fourth quarter ended Dec 31, 2012, MBM posted a 10.6% year-on-year drop in net profit to RM26mil while revenue was 45% higher at RM539mil.

The group says the decline in net profit for the quarter under review was due to RM6.6mil spent on acquisition related costs for Hirotako Holdings Bhd.

The group’s gross debt to equity ratio as at Dec 31, 2011 is 32.8%, compared with only 3.3% a year earlier.

Net assets per share rose to RM4.55 as at Dec 31, 2011, from RM4.20 a year earlier.

First fund-raising exercise

On Feb 24, MBM announced a 3-for-10 bonus issue to reward shareholders.

The group also announced its first fund-raising exercise since its public listing in 1995, with a proposed 3-for-10 rights issue with free warrants, which could raise some RM315 million when fully exercised, for its expansion plan.

OSK Research says while the enlarged share base and potential 38% dilution to earnings per share (EPS) are a cause for concern, there is a potential price upside for MBM’s stock as the group’s total consolidated earnings (including that from newly-acquired Hirotako), could surge by 50% in the current financial year.

“We see the proposed rights issue and warrants as the best way for MBM to optimise its capital. It will lower the group’s financing expenses, especially after having raised RM396mil from bank borrowings to pay RM409mil for Hirotako.

“From the proceeds raised, MBM could potentially reduce net gearing to 8% and 5.3% for this and next year respectively. We also see the MBM going back to a net cash position by 2015, from a net gearing of 13.9% currently.”

OSK Research says MBM’s return on equity (ROE) would still be in double digits at an estimated 10% to 11% for 2012 to 2014.

Stock valuations

Kenanga Research maintains its “outperform” call on MBM’s stock, with a target price of RM5.38 per share based on a forecast of eight times MBM’s PER (price-to-earnings ratio) for its financial year 2012 estimated earnings.

RHB Research maintains its “outperform” call on MBM’s stock, with a fair value of RM5.05 per share based on 8.5 times its forecast 2012 earnings.

“Our target PER reflects the increasing shift of MBM’s earnings derived from higher value-added manufacturing activities.”

However, RHB Research notes that risks for MBM include a weaker economy and tighter financing conditions that could result in lower car sales, as well as unfavourable foreign exchange trends.

OSK Research has upgraded its call on MBM’s from “sell” to “buy”, with a fair value of RM5.34 per share.

“Our fair value implies a forward price-to-earnings multiple of 10.7 times, which is in line with the automotive sector’s average currently,” says OSK Research.

The research unit opines that with the higher liquidity base and the group’s market cap breaching RM1bil, MBM’s stock may come into the radar of institutional investors going forward, including foreign funds.


  • Diploma in Civil Engineering, University Technology MARA, Shah Alam
  • Degree in Civil Engineering, University Technology MARA, Shah Alam
  • Executive Diploma in Business Administration, University of Central Lancashire, United Kingdom.

Working Experience / Other Directorships


  • Group Advisor, PNA Technologies Sdn Bhd
  • Group Advisor, Syarikat Metal Industries of Malaysia Sdn Bhd


  • Group Advisor New Business Development of Ingress Corporation Berhad
  • President & Chief Executive Officer of Perusahaan Otomobil Kedua Sdn Bhd (Perodua) from 2013 to 2018
  • Managing Director of Perodua from 2009 to 2012
  • Executive Director of Strategic Marketing Group, UMW Toyota Motor Sdn Bhd from 2007 to 2009
  • Executive Director of Strategic Planning Group, UMW Toyota Motor Sdn Bhd in 2006
  • Executive Director, Sales Group of UMW Toyota Motor Sdn Bhd from 2004 to 2005
  • Director, Human Capital Group of UMW Toyota Motor Sdn Bhd from 2001 to 2003
  • General Manager, HR and Administration of UMW Toyota Motor Sdn Bhd from 1996 to 2001
  • Manager, Property and Facilities of UMW Toyota Motor Sdn Bhd from 1992 to 1996
  • Property and Purchasing Manager of Utusan Melayu (M) Sdn Bhd in 1992
  • Property and Maintenance Manager of Techart Sdn Bhd from 1985 to 1991
  • Project Engineer of Techart Sdn Bhd from 1983 to 1985
  • Board of Director Universiti Teknologi Mara (UiTM)
  • Board of Director Universiti Teknologi Mara Holding (UiTMH)
  • Board of Director Universiti Malaysia Pahang (UMP)

Membership of Board Committees in MBMR:

  • Nominating and Remuneration Committee (Chairman)
  • Audit Committee (Member)
  • Group Transformation Committee* (Chairman)

*Dissolved on 27 January 2022

Date Appointed to the Board

  • 29 May 2019

Mr. Low Hin Choong was appointed to the Board on 18 May 2001. He is currently the Chairman of the Long Term Incentive Plan Committee and a member of the Risk Management and Sustainability Committee.

He holds a Bachelor of Science (Honours) Degree in Business Administration and Computer Science from Queen’s University Belfast, United Kingdom.

Mr. Low has over 30 years of experience in the IT industry. He is the founding director of his own successful software applications company. Mr. Low has since retired but remains as a director and advisor to the company.

Mr. Low is presently a Director of Perusahaan Otomobil Kedua Sdn Bhd and an alternate Director at Med-Bumikar MARA Sdn Bhd. He also holds directorships in Reliance Business Solutions Sdn Bhd, Rosen Sdn Bhd, RBS Technology Sdn Bhd and CathRx Ltd, an Australian-based medical device company.

His current directorships in other companies within the MBMR Group include Hirotako Holdings Berhad, Hirotako Acoustics Sdn Bhd, Autoliv Hirotako Sdn Bhd, Federal Auto Holdings Berhad, Oriental Metal Industries (M) Sdn Bhd, Daihatsu Malaysia Sdn Bhd and MBMR Properties Sdn Bhd.

Mr. Ng Seng Kong has been on the Board since 1 October 2015. He is currently a member of the Audit Committee.

Mr. Ng is a Fellow Member of the Association of Chartered Certified Accountants, United Kingdom and a Fellow Member of the Chartered Institute of Management Accountants, United Kingdom. He is also a member of Chartered Global Management Accountant.

Mr. Ng started his career as an auditor at a chartered accounting firm in London from 1975 to 1979. Upon returning to Malaysia, he joined MKS Sdn Bhd as a Financial Controller from 1980 to 1981. Presently, Mr. Ng serves as Managing Director of UMS Holdings Berhad and UMS Corporation Sdn Bhd.

Mr. Ng also currently holds directorships in several companies within the MBMR Group namely, Hirotako Holdings Berhad, Hirotako Acoustics Sdn Bhd, Autoliv Hirotako Sdn Bhd, Federal Auto Holdings Berhad, Oriental Metal Industries (M) Sdn Bhd, MBMR Properties Sdn Bhd, Teck See Plastic Sdn Bhd, Hino Motors Sales (Malaysia) Sdn Bhd and Hino Motors Manufacturing (Malaysia) Sdn Bhd. He is also a Director on the Board of Med-Bumikar MARA Sdn Bhd.


  • Master of Arts, International Studies, Ohio University, United States of America
  • Bachelor of Economics (Hons), University of Malaya, Malaysia

Working Experience / Other Directorships


  • Chairman of Zelan Berhad


  • Director of CIMB Principal Asset Management Berhad
  • Chairman of Faber Group Berhad from 2001 to 2008
  • Various management positions in Khazanah Nasional Berhad from 1994 to 2004 including Managing Director position.
  • Special Assistant to the Secretary General of Ministry of Finance from 1993 to 1994
  • Principal Assistant Secretary in the Finance Division, Federal Treasury under Ministry of Finance from 1991 to 1993
  • Deputy Director of Petroleum Development Division under Prime Minister’s Department from 1986 to 1991
  • Principal Assistant Secretary in Foreign Investment Division, Economic Planning Unit under Prime Minister’s Department from 1982 to 1984
  • Attachment with Investment Division of the Malaysian Tobacco Company Berhad under the British Malaysia Industry & Trade Association training scheme from 1984 to 1985
  • Principal Assistant Secretary in Economic & International Division, Federal Treasury under Ministry of Finance from 1980 to 1981
  • Principal Assistant Secretary in Budget Division, Federal Treasury under Ministry of Finance from 1978 to 1980
  • Assistant Director in Industries Division under Ministry of International Trade & Industry from 1973 to 1978

Membership of Board Committees in MBMR:

  • Nominating and Remuneration Committee (Member)
  • Audit Committee (Chairman)
  • Long Term Incentive Plan Committee (Member)
  • Risk Management and Sustainability Committee (Member)

Date Appointed to the Board

  • 16 January 2018


  • Fellow Member of the Institute of Chartered Accountants in England and Wales
  • Member of the Malaysian Institute of Accountants
  • Bachelor degree in Accountancy

Working Experience / Other Directorships


  • Chief Executive Officer of Berjaya Capital Berhad
  • Non-Independent Non- Executive Director of 7-Eleven Malaysia Holdings Berhad
  • Audit Committee Member of Razak School of Government


  • Acting Chief Executive Officer and Chief Financial Officer of MARA Corporation Sdn Bhd from 2016 to 2019
  • Chief Operating and Financial Officer of Unitar Capital Sdn Bhd from 2012 to 2016
  • Advisor of ECS Solutions Sdn Bhd from 2011 to 2012
  • Audit and Assurance Director of Ernst & Young from 2008 to 2011
  • Manager under Banking and Capital Market Group of Ernst & Young LLP, London from 2003 to 2008
  • Internal Auditor of Habib Bank AG Zurich from 2002 to 2003
  • Senior Auditor of John Cumming Ross, Ltd in 2001
  • Senior Auditor of Andersen & Co, Malaysia (formerly known as Arthur Andersen & Co) from 1998 to 2001

Membership of Board Committees in MBMR:

  • Audit and Risk Management Committee (Member)
  • Group Transformation Committee* (Member)

*Dissolved on 27 January 2022

Date Appointed to the Board

  • 28 January 2019

Ms. Wong Fay Lee was appointed to the Board as a Non-Executive Director on 29 May 2019. She is currently the Chairman of the Risk Management and Sustainability Committee and a member of the Nominating and Remuneration Committee.

Ms. Wong graduated from the University of Sydney with a Bachelor’s Degree in Law. She also holds a Graduate Diploma in Applied Finance and Investments from Securities Institute Australia.

She started her career in 1987 as a corporate finance lawyer with Mallesons Stephen Jaques in Sydney, Australia and later as a Senior Associate in Mallesons’ South East Asian practice. She then joined the Malaysian Securities Commission as Manager of Product Development from 1993 to 1995.

Her past leadership positions include serving as Chief Executive Officer at Malaysian Derivatives Clearing House Bhd (now known as Bursa Malaysia Derivatives Berhad) from 1995 to 2000, Adviser to the Clearing Division of Hong Kong Exchanges and Clearing Limited from 2001 to 2002 and she was also an Independent Director at KFH Asset Management Sdn Bhd from 2002 to 2010.

Ms Wong was previously appointed as an Executive Director in MBMR from 2014 to 2017 while concurrently serving as MBMR’s Head of Governance, Legal Risk & Compliance between 2011 until 2018. She was also appointed as Managing Director of Federal Auto Holdings Berhad from 2016 to 2017.

She is currently the Chairman of Federal Auto Holdings Berhad and a Director at Daihatsu (Malaysia) Sdn Bhd, Med-Bumikar MARA Sdn Bhd, and Astute Fund Management Berhad (formerly Apex Investment Services Berhad).


  • Bachelor of Economic, International Islamic University Malaysia
  • London Chamber of Commerce & Industry (LCCI) Higher – Business Statistics
  • Six Sigma – Champion Training, Motorola University

Working Experience / Other Directorships


  • Group Chief Executive Officer
  • Director of Daihatsu (Malaysia) Sdn Bhd
  • Director of Federal Auto Holdings Berhad
  • Director of Autoliv Hirotako Sdn Bhd
  • Director of Teck See Plastic Sdn Bhd
  • Director of MBMR Properties Sdn Bhd
  • Director of Oriental Metal Industries (M) Sdn Bhd
  • Director of Hirotako Acoustics Sdn Bhd
  • Director of Perusahaan Otomobil Kedua Sdn Bhd


  • Head, Automotive Distribution Division, Hicom Holdings Berhad (HHB) – Holding
    company of listed DRB-Hicom Berhad
  • Director, Mitsubishi Motors Malaysia (MMM)
  • Director, Isuzu Motors Sdn Bhd (IMSB)
  • Director, Edaran Otomobil Nasional (EON)
  • Director, EON Auto Mart Sdn Bhd
  • Director, Euromobil Sdn Bhd
  • Director, Hicom Auto Sdn Bhd
  • Director, AVIS Malaysia
  • Director, ACM
  • Director, DRB-Hicom Commercial Vehicles Sdn Bhd (DHCV)
  • Director, DRB-Hicom Auto Solution Sdn Bhd
  • Senior General Manager – Sales & Marketing Division, Perodua Sales Sdn Bhd
  • General Manager – Sales Division, Perodua Sales Sdn Bhd
  • Deputy General Manager – Sales Operations, Perodua Sales Sdn Bhd
  • Senior Manager – Sales Planning Department, Perodua Sales Sdn Bhd
  • Senior Manager – Distribution Department, Perodua Sales Sdn Bhd
  • Coordinator, MD’s Office, Perodua Sales Sdn Bhd
  • Manager – Market Planning, UMW Toyota Motor Sdn Bhd
  • Marketing Manager, UMW Engineering Sdn Bhd
  • Strategic Planning & Business Development Manager, UMW Auto Parts Sdn Bhd
  • Marketing Administration Executive, UMW Heavy Equipment Group
  • Corporate Planning & Project Executive, UMW Corporation Sdn Bhd
  • Economic Analyst, Federation of Malaysia Manufacturers (FMM)

Date Appointed to MBMR

  • 8th February 2021


  • Bachelor of Science in Accounting (Honours), Oklahoma State University, United States of America.
  • Member of Malaysian Institute of Accountants (MIA)

Working Experience / Other Directorships


  • Group Chief Financial Officer of MBM Resources Berhad


  • Group Financial Controller of MBM Resources Berhad
  • Director of Daihatsu (Malaysia) Sdn Bhd
  • Director of Federal Auto Holdings Berhad
  • Director of Autoliv Hirotako Sdn Bhd
  • Director of Teck See Plastic Sdn Bhd
  • Acting President & CEO of MBM Resources Berhad
  • Partner of Annbren Management & Consultancy Services
  • Group Financial Controller of Scomi Group Berhad
  • Regional Finance Controller of Scomi Group Berhad, Oilfield services
  • Audit Manager of Ernst & Young

Date Appointed to MBMR

  • 1st November 2016


  • B. A. (Hons) Accounting and Financial Studies, University of Exter, UK
  • Certified Training Professional, ARTDO-ITD International
  • Member, Society for Human Resource Management
  • Member, International Coaching Federation

Working Experience / Other Directorships


  • Director, Group Corporate Services


  • Director, Transformation Office of MBMR Resources Berhad
  • Board of Trustees of Kelab Belia Kalsom (The Kalsom Movement)
  • Director/Head, Group Human Capital of MARA Corporation Sdn Bhd
  • Executive Director, UNITAR International Academy Sdn Bhd
  • Director, Vice Chancellor’s Office of UNITAR International University
  • Head of Collaboration of Arise Asia Sdn Bhd
  • Vice President, Strategic Human Capital Management of Khazanah National Berhad
  • Consultant of Mercer Human Capital Consulting

Date Appointed to MBMR

  • 4th February 2020


2022 was a highly successful year for MBMR with recordbreaking revenue and profits. As we celebrate the Groupwide achievements, we are also proud that the exceptional performance was achieved on the back of progress made in our sustainability strategies and objectives in the year.

Key environmental achievements in 2022 involved the increase in our Group-wide reduce, reuse and recycle initiatives from the preceding year. These initiatives included the installation of solar panels in our manufacturing plants and continued Group-wide upgrades from conventional to LED lighting. We also reduced the Group’s water and electricity intensity consumption even with the resumption of normal operating hours and a substantial increase in our manufacturing numbers.

Waste management saw an improvement along with the expansion of our recycling initiatives. In our manufacturing companies, the continued maintenance of the ISO 14001 environmental management system accreditation provides the assurance to our stakeholders that our operations comply with environmental regulations while also generating cost-savings through more efficient use of resources and waste management.

On the social front, we strongly believe that our investment in people is a key driver of commercial success throughout the Group, underpinned by employee engagement and a firmly integrated culture of employee appreciation, development, diversity and inclusion. From providing a safe working environment, encouraging diversity and inclusion at all levels to remuneration and benefits benchmarking and ensuring that our employees are rewarded for their respective contributions, have access to training and career development opportunities, we will continue to attract and retain the best talent.

The talent development programmes for the upskilling of our employees were undertaken with this belief in mind. We have also expanded the talent development to the communities, most notably our pledge towards the establishment of MBMR’s Scholarship Programme to support the younger generation to gain access to quality education, details of which will be announced in due course.

Additionally, our social sustainability initiatives, which included wellness programmes and our CSR activities throughout the year have helped us in being recognised as a better employer engaged in more responsible business practices. The employee and customer satisfaction surveys conducted have achieved an encouraging score, an indication that our sustainability and business strategieshavehadapositiveeffectonour stakeholders. As we expand our efforts in the respective overarching pillars, it is our hope that the satisfaction scores would increase further.

Concurrently, digitalisation initiatives have also enabled us to build closer relationships with our dealers and customers in our motor trading companies, contributing to better overall sales and service figures. In our manufacturing companies, improved monitoring and adoption of automation has improved the operational efficiencies in our manufacturing plants.

As the Group widens the adoption of digitalisation initiatives, the ongoing deployment of our Data Protection and Cyber Security programmes under the Governance pillar have improved the Group’s Cyber Security infrastructure and awareness.

Our efforts to improve our Group’s businesses are supported by a robust governance, risk management and internal control framework and practices. We aim to instil the highest standards of integrity, honesty, and transparency within the Group. Other significant initiatives under the Governance pillar involve the implementation of fundamental Group-wide policies with the aim of improving overall governance within the Group. This includes the adoption of a new Group Enterprise Risk Management Policy and Framework to ensure effective identification, assessment and management of the Group’s risks in a holistic manner towards achieving the Group’s business objectives.

We see environmental, social, economic and governance priorities as an important part of our mission to be the automotive partner of choice to our stakeholders. Through our ongoing investments in knowledge development and management, operational excellence, innovative technology adoption and digitalisation, we continue to drive our businesses to directly address these pillars to help in ensuring the sustainability of our planet. We do not see an alternative. Therefore, we believe continuous improvements in the material sustainability matters that we have identified are aligned with delivering sustainable returns to our shareholders. Having embarked on our transformation journey since 2019 and with our commitment to continue on that course, we aim to deliver additional and continuous improvements.

Moving forward, existing initiatives undertaken by the Group under all four pillars of sustainability will be further refined and expanded. The Group will also seek to further improve disclosures in line with recent enhanced sustainability reporting requirements.

Encik Aqil bin Ahmad Azizuddin