AUTOMOTIVE
 [%lKTH%] 
Research by Kenanga
Neutral

“Back in Full Force in May 2024”

New vehicle sales in Malaysia, also known as total industry volume (TIV), soared 18% MoM to 68,665 units in May 2024 as deliveries rose in lockstep with higher production in the absence of major festive holidays. With 5MCY24 TIV making up 44% of our full-year projection of 740k units (-8% YoY), we consider the number meeting our expectation. 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: RM6.30) which is a good proxy to the affordable and fuel-efficient Perodua brand. It also offers an attractive dividend yield of about 7%.

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

AUTOMOTIVE
 $KLSE-MBMR 
Research by Kenanga
Neutral

“Back in Full Force in May 2024”

New vehicle sales in Malaysia, also known as total industry volume (TIV), soared 18% MoM to 68,665 units in May 2024 as deliveries rose in lockstep with higher production in the absence of major festive holidays. With 5MCY24 TIV making up 44% of our full-year projection of 740k units (-8% YoY), we consider the number meeting our expectation. 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: RM6.30) which is a good proxy to the affordable and fuel-efficient Perodua brand. It also offers an attractive dividend yield of about 7%.

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