Tuesday, December 20, 2011

Maybank IB Research maintains underweight on automotive sector

KUALA LUMPUR (Dec 20): Maybank IB Research is maintaining its underweight recommendation on the automotive sector.

'We retain our Hold calls on UMW and MBM while Tan Chong Motor remains a Sell,' it said on Tuesday.

Maybank Research said the sequentially weaker November's total industry volume of 48,702 units (down 9% on-month) was expected and the 11-month vehicles sales of 552,600 units (up 0.4% on-year; 92% of full-year estimates) was on track to meet its 2011 forecast.

'We expect a challenging 2012, on muted +1% to 2% on-year growth. 1Q12 sales will be weak, dampened by distribution issues post Thai flood aftermath. Margin pressure will be a likely drag to profits, on dearer component costs (stronger Yen and USD against RM) and higher A&P costs. In light of this, the sector remains an Underweight,' it said.


  1. There will be ups and downs in any market. This rise and fall will always be there in the Automotive manufacturing units.
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  2. Definitely it depends on the market trends. Hope 2012 turns to be a good year for the Automotive sector.
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