PETALING JAYA: MBM Resources Bhd is expected to see a substantial boost in future earnings from the inclusion of Hino Motors (M) Sdn Bhd (HMMSB) into the group, say analysts.
On May 25, MBM completed the acquisition of a 42% stake in HMMSB for RM25.8mil.
HMMSB owns the rights from Hino Motors Ltd of Japan to market and service Hino commercial vehicles and spare parts in Malaysia.
HMMSB reported about RM3mil in pre-tax profit for the first quarter ended June 30.
Mayban Securities said in its report on Thursday that it had revised upward its earnings forecasts for the company, which has led to an upgrade of its fair value on the stock.
The research house, which has a “positive†call on the counter, said it continued to like MBM for its excellent defensive qualities due to “its exposure to the de-facto Perodua monopoly in entry-level vehicles†in the country and its high-end yields.
“New models and potential aggressive exports are added prospective catalysts for the counter,†Mayban Securities said.
MBM continues to be dependent on 23.6%-associate Perusahaan Otomobil Kedua Sdn Bhd (Perodua), with Perodua-related businesses contributing 69% to pre-tax profit in the first six months of this year.
Perodua has significantly improved the delivery time of the MyVi to about two months from six months in early 2005.
The automaker is also increasing production capacity to 250,000 units per annum by end-2007 from the current 210,000 units with the construction of a new paint shop.
With the increased capacity, MyVi will be exported to Britain in September. Perodua will also export to Indonesia in June next year its model, which will re-badged as Daihatsu.
“We reckon the model will be a success in export markets, particularly in Indonesia, due to its value-for-money,†the research house said.
However, new replacement model launches due in early 2007 might result in lower sales for the Kancil and Kelisa in the remainder of 2006 “but we expect it (the new model) to be as successful as the MyVi,†Mayban Securities said.
