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.

2 comments:

  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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