Auto sales seen edg­ing up in com­ing months

The Sun (Malaysia) - - SUNBIZ -

PE­TAL­ING JAYA: An­a­lysts are main­tain­ing their fore­casts for to­tal sales vol­ume (TIV) for the au­to­mo­tive in­dus­try with the ex­pec­ta­tion of higher sales in the com­ing months.

The lo­cal au­to­mo­tive sec­tor recorded a 23.2% month-on-month growth in to­tal in­dus­try vol­ume (TIV) for Au­gust to 52,300 units, thanks to a longer work­ing month and strong de­mand for the newly launched Pero­dua Bezza.

How­ever, TIV dropped 2.2% year-on-year (y-o-y), re­flect­ing weak con­sumer sen­ti­ments. Year to date, TIV dropped by 14.8% y-o-y to 370,300 units, on sub­dued con­sumer sen­ti­ment and hold­ing back of pur­chases in an­tic­i­pa­tion of new model launches by Pero­dua and Pro­ton in the sec­ond half of the year.

MIDF Re­search said the year to date TIV, if an­nu­alised, ac­counts for 94% of its FY16 TIV of 593,302 units.

“We stick to our num­bers as TIV should im­prove fur­ther in the com­ing months given sev­eral new vol­ume model launches in the A and B seg­ments by year end, es­pe­cially by Pro­ton. Af­ter the Per­sona, Pro­ton is sched­uled to launch the new Saga and a re­badged ver­sion of the Suzuki Er­tiga by year-end,” it said.

Hong Leong In­vest­ment Bank (HLIB) Re­search is also main­tain­ing its 2016 TIV as­sump­tion of 613,400 units (-8.0% y-o-y) on the back of strong or­ders for newly launched Pero­dua Bezza and Pro­ton Per­sona as well as an­tic­i­pated strong de­mand for up­com­ing Pro­ton new launches – Saga and Er­tiga.

None­the­less, MIDF Re­search high­lighted that earn­ings for auto com­pa­nies un­der its cov­er­age have de­te­ri­o­rated as sales have been driven by ag­gres­sive cam­paigns and out­right dis­count­ing, while the ring­git re­mains rel­a­tively weak against the US dol­lar and Ja­panese yen.

“We still ex­pect UMW Hold­ings Bhd and Tan Chong Mo­tor Hold­ings Bhd to re­port losses for both FY16 and FY17. Not­with­stand­ing the im­prove­ments in Au­gust, TIV num­bers re­ported by the re­spec­tive com­pa­nies so far are in-line with our ex­pec­ta­tions,” it said.

MIDF Re­search said Ber­jaya Auto Bhd re­mains its top sec­tor pick, with key share price cat­a­lysts over the next 12 months of at­trac­tive div­i­dend yield of 7% un­der­pinned by solid net cash; fur­ther mar­ket share wins driven by new launches; re­cov­ery in man­u­fac­tur­ing earn­ings; value un­lock­ing from the po­ten­tial list­ing of BAuto Philip­pines.

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