AUTOMOTIVE
[%QRWO%] [%xzdU%] [%XlSP%] [%sVhc%] [%TDoQ%] 
Research by Kenanga
Neutral

“A Two-Speed Market”

We maintain NEUTRAL on the sector. We project industry-wide sales volume, also known as total industry volume (TIV), to contract by 11% to 710k units in CY24, which is a tad more conservative than 740k units projected by Malaysia Automotive Association (MAA). We believe while it will be business as usual for the affordable segment, fuel subsidy rationalisation will likely hurt the demand for mid-market models, giving rise to a two-speed automotive market locally in CY24. In general, the industry’s earnings visibility is still good, backed by a booking backlog of 200k units. Our sector top pick is MBMR (OP; TP: RM5.80), which is a good proxy to the affordable and fuel-efficient Perodua brand. It also offers an attractive dividend yield of about 9%.

Analyst(s):
Wan Mustaqim Bin Wan Ab Aziz 
[%jWqq%]

AUTOMOTIVE
$KLSE-MBMR $KLSE-BAUTO $KLSE-DRBHCOM $KLSE-HIL $KLSE-HLIND 
Research by Kenanga
Neutral

“A Two-Speed Market”

We maintain NEUTRAL on the sector. We project industry-wide sales volume, also known as total industry volume (TIV), to contract by 11% to 710k units in CY24, which is a tad more conservative than 740k units projected by Malaysia Automotive Association (MAA). We believe while it will be business as usual for the affordable segment, fuel subsidy rationalisation will likely hurt the demand for mid-market models, giving rise to a two-speed automotive market locally in CY24. In general, the industry’s earnings visibility is still good, backed by a booking backlog of 200k units. Our sector top pick is MBMR (OP; TP: RM5.80), which is a good proxy to the affordable and fuel-efficient Perodua brand. It also offers an attractive dividend yield of about 9%.

Analyst(s):
Wan Mustaqim Bin Wan Ab Aziz 
wanmustaqim@kenanga.com.my

$HLIND / 3301 (HONG LEONG INDUSTRIES BERHAD)