MIDF Research expects automotive sector to see strong June TIV

KUALA LUMPUR: MIDF Research expects the automotive sector to see strong total industry volume (TIV) in June based on encouraging preliminary numbers announced by industry players.

In a note, the research house said Perodua is estimated to have registered 21,200 units in June (+12% month-on-month (m-o-m)), Proton 14,200 units (+53% m-o-m) and Toyota 8,900 units (+19% m-o-m).

“Judging by the TIV momentum so far and strong outstanding bookings, we see potential upside to both our Perodua volume projection and overall TIV projection.

“Overall, we estimate June TIV to register at between 60,000-65,000 units (+21% to +31% mom),“ it said.

As such, MIDF Research has maintained its positive rating for the automotive sector, with buy calls for MBM Resources Bhd (MBMR) and UMW Holdings Bhd, given their respective 22.6% and 38% stakes in Perodua.

It noted that MBMR provides cheaper entry and is more leveraged to Perodua’s earnings.

“MBMR is also a multipronged play into Perodua via its parts manufacturing division which supplies components to Perodua and retailing division which is the largest Perodua dealer group accounting for around 10% of overall Perodua sales historically,“ it added. – Bernama