Hil Industries Berhad

$HIL / 8443 (HIL INDUSTRIES BERHAD)
Research Report by Kenanga

$HIL / 8443 (HIL INDUSTRIES BERHAD)
Research by Kenanga
Outperform - TP RM1.10

"Solid Supply Chain to Perodua"

HIL’s 1HFY24 results met expectations. Its 1HFY24 net profit rose 34% YoY driven largely by strong auto parts sales to Perodua and higher property segment’s profit. Its manufacturing business will be buoyed by the all-new Perodua D66b in early-2025 and new manufacturing plant in 3QFY24. We maintain our forecasts and TP of RM1.10. Upgrade to OUTPERFORM from MARKET PERFORM as value has emerged after the recent correction in its share price.

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

General Meetings: Outcome of Meeting

$HIL / 8443 (HIL INDUSTRIES BERHAD)
Research by Kenanga
Market Perform – TP of MYR 1.10

“Rides on Strong Perodua Sales”

HIL’s 1QFY24 results met expectations. Its 1QFY24 net profit rose 52% YoY driven largely by strong auto parts sales to Perodua and higher property profits. Its manufacturing business will be buoyed by the all-new Perodua D66b in early-2025. We maintain our FY24 net profit forecast, but raise our FY25 number by 10% and lift our TP by 17% to RM1.10 (from RM0.94). Maintain MARKET PERFORM.

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

HIL - Notice of Book Closure

Quarterly rpt on consolidated results for the financial period ended 31/03/2024

First and Final Dividend

HIL INDUSTRIES BERHAD - PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY

Annual Report & CG Report - 2023

General Meetings: Notice of Meeting

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : RELATED PARTY TRANSACTIONSHIL INDUSTRIES BERHAD ("HIL" OR "COMPANY")

(I) PROPOSED SHARE ACQUISITION; AND

(II) PROPOSED LAND ACQUISITION

(COLLECTIVELY REFERRED TO AS THE "PROPOSALS")

Annual Audited Accounts - 31 Dec 2023

OTHERSHIL INDUSTRIES BERHAD ("the Company")
- PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY

OTHERSHIL INDUSTRIES BERHAD
- Declaration of a first and final single tier dividend of 3.0 sen per ordinary
share in respect of the financial year ended 31 December 2023.

AUTOMOTIVE
$MBMR / 5983 (MBM RESOURCES BHD) $BAUTO / 5248 (BERMAZ AUTO BERHAD) $DRBHCOM / 1619 (DRB-HICOM BERHAD) $HLIND / 3301 (HONG LEONG INDUSTRIES BERHAD) $HIL / 8443 (HIL INDUSTRIES BERHAD)
Research by Kenanga
Neutral

“Chinese New Year Lull in Feb 2024”

New vehicle sales in Malaysia, also known as total industry volume (TIV), came in at 62,833 units in Feb 2024 (-4% MoM, -1% YoY), easing MoM on a shorter working month due to the Chinese New Year break. With 2MCY24 TIV making up 18% of our full-year projection of 710k units (-11% YoY), we consider the number meeting our expectation. Our full-year projection is a tad lower than the 740k units projected by Malaysia Automotive Association (MAA). We hold the view that the impending fuel subsidy rationalisation will likely hurt demand for mid-market models, while remaining optimistic on the sales of affordable vehicles. The industry’s earnings visibility will be backed by a booking backlog of 200k units, unchanged compared to a month ago. Our sector top pick is MBMR (OP; TP: RM5.80), which focuses on the affordable segment. It also offers an attractive dividend yield of about 9%.

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

AUTOMOTIVE
$MBMR / 5983 (MBM RESOURCES BHD) $BAUTO / 5248 (BERMAZ AUTO BERHAD) $DRBHCOM / 1619 (DRB-HICOM BERHAD) $HIL / 8443 (HIL INDUSTRIES BERHAD) $HLIND / 3301 (HONG LEONG INDUSTRIES BERHAD)
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

AUTOMOTIVE
$MBMR / 5983 (MBM RESOURCES BHD) $HLIND / 3301 (HONG LEONG INDUSTRIES BERHAD) $HIL / 8443 (HIL INDUSTRIES BERHAD) $SIME / 4197 (SIME DARBY BERHAD) $BAUTO / 5248 (BERMAZ AUTO BERHAD)
Research by Kenanga
Neutral

“4QCY23 Report Card: Cruising Ahead”

The sector’s earnings delivery (against our expectations) was better sequentially as 3 out of 7 companies surpassed our expectations. Their CY23 earnings growth was mainly driven by the record automotive industry sales led by Perodua, as well as strong margins from new models. We maintain our CY24 forecast of new vehicle sales in Malaysia, also known as total industry volume (TIV), at 710k units which is a tad lower than the 740k units projected by Malaysia Automotive Association (MAA). We hold the view that the impending fuel subsidy rationalisation will likely hurt demand for mid-market models, while remaining optimistic on the sales of affordable vehicles. The industry’s earnings visibility will be backed by a booking backlog of 200k units. Our sector top pick is MBMR (OP; TP: RM5.80), which focuses on the affordable segment. It also offers an attractive dividend yield of about 9%.

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

General Meetings: Outcome of Meeting

CIRCULAR TO SHAREHOLDERS IN RELATION TO THE: PART A - (I) PROPOSED ACQUISITION BY AMVERTON PROP SDN. BHD. ("AMVERTON PROP"), AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF HIL INDUSTRIES BERHAD ("HIL"), OF 100% EQUITY INTEREST IN BROADWISE CORPORATION SDN. BHD. FROM PUAN SRI DATIN CATHERINE YEOH ENG NEO, DATO MILTON NORMAN NG KWEE LEONG AND KONSEP KEKAL SDN. BHD. FOR A CASH CONSIDERATION OF RM46.0 MILLION; (II) PROPOSED ACQUISITION BY AMVERTON PROP OF A PARCEL OF FREEHOLD LAND MEASURING APPROXIMATELY 3.0 ACRES LOCATED IN MUKIM BATU, DAERAH KUALA LUMPUR, WILAYAH PERSEKUTUAN KUALA LUMPUR FROM A & M MODERN HOMES SDN. BHD. FOR A CASH CONSIDERATION OF RM47.0 MILLION (COLLECTIVELY REFERRED TO AS THE "PROPOSALS"); PART B - INDEPENDENT ADVICE LETTER FROM STRATEGIC CAPITAL ADVISORY SDN. BHD. TO THE NON-INTERESTED SHAREHOLDERS OF HIL IN RELATION TO THE PROPOSALS; AND NOTICE OF EXTRAORDINARY GENERAL MEETING

General Meetings: Notice of Meeting

$HIL / 8443 (HIL INDUSTRIES BERHAD)
Research by Kenanga
Market Perform - TP of RM0.94

"Double Happiness"

HIL’s FY23 results beat expectations. Its FY23 core net profit rose 77% YoY, driven by strong auto parts sales to Perodua and higher property profits. We raise our FY24 net profit forecast by 2%, lift our TP by 3% to RM0.94 (from RM0.91) and maintain our MARKET PERFORM call.

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

AUTOMOTIVE
$BAUTO / 5248 (BERMAZ AUTO BERHAD) $DRBHCOM / 1619 (DRB-HICOM BERHAD) $HIL / 8443 (HIL INDUSTRIES BERHAD) $HLIND / 3301 (HONG LEONG INDUSTRIES BERHAD) $MBMR / 5983 (MBM RESOURCES BHD)
Research by Kenanga
Neutral

"YoY Growth in TIV in Jan 2024"

New vehicle sales in Malaysia, also known as total industry volume (TIV), came in at 65,499 units in Jan 2024 (-16% MoM, +31% YoY), eased MoM against a seasonally high base in Dec 2023, but remained on a growth trajectory YoY. With Jan 2024 TIV making up 9% of our full-year projection of 710k units (-11% YoY), we consider the number meeting our expectation. Our full-year projection is a tad lower than the 740k units projected by Malaysia Automotive Association (MAA). We hold the view that the impending fuel subsidy rationalisation will likely hurt the demand for mid-market models, while remaining optimistic on the sales of affordable vehicles. The industry’s earnings visibility will be backed by a booking backlog of 200k units, unchanged compared to a month ago. Our sector top pick is MBMR (OP; TP: RM5.50), which focuses on the affordable segment. It also offers an attractive dividend yield of about 11%.

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

Quarterly rpt on consolidated results for the financial period ended 31/12/2023

Change in Remuneration Committee - DATO' MILTON NORMAN NG KWEE LEONG

Change in Remuneration Committee - DATO' IR HASHIM BIN OSMAN

PUBLIC SHAREHOLDINGS SPREAD

Notice of Person Ceasing (Section 139 of CA 2016) - MR HLIB NOMINEES (TEMPATAN) SDN BHD - PLEDGED SECURITIES ACCOUNT FOR MR YAP KOK WENG

$HIL / 8443 (HIL INDUSTRIES BERHAD)
Research by Kenanga
Market Perform – Target Price RM0.91

“Riding on Perodua’s Strong Sales”

HIL’s 9MFY23 results beat expectations on stronger-than-expected sales of auto parts to Perodua. To reflect our recent upgrade in Perodua’s vehicle sales in CY23 and CY24, we raise our FY23-24F net profit forecasts for HIL by 16% and 4%, respectively. Consequently, we lift our TP by 5% to RM0.91 (from RM0.87) and upgrade our call to MARKET PERFORM from UNDERPERFORM.

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

Quarterly rpt on consolidated results for the financial period ended 30/09/2023

PUBLIC SHAREHOLDINGS SPREAD