Net profit for the first quarter ended March 31, 2023 (Q1 FY2023) came in at RM80 million, a dip of 10.4% from the same quarter last year.
However, profit surged 39.5% quarter-on-quarter, mostly due to lower costs and the absence of the one-off prosperity tax.
Perodua driving group forward
RHB Investment Bank Bhd analyst Jim Lim Khai Xhiang said he felt reassured over MBM’s ability to chalk new highs in FY2023, largely driven by Perodua, which is 20%-owned by the group.
“(MBM’s) management is confident of Perodua’s ability to achieve its 314,000-unit sales target for the year, supported by the marque’s current 190,000 (unit) order backlog.”
Perodua has received around 40,000 new orders in May, more than the monthly norm of 30,000 to 35,000 orders, which points to resilient demand for the year.
Kenanga Investment Bank analyst Wan Mustaqim Aziz noted that the high order numbers have already surpassed pre-pandemic levels.
MBM shared that Bezza and Myvi account for slightly more than half of Perodua’s total bookings.
“Given that the lowest-priced Perodua models are the most in demand, we think that some buyers could be first-time buyers and/or are more price sensitive,” said Lim.
Demand for the group’s higher-end models is not as promising.
There has been a gradual slow-down in orders for cars priced above RM200,000 with minimal waiting lists. Nonetheless, MIDF Research notes that around 90% of the group’s motor trading volume is generated from its Perodua dealerships.
Chip shortage risk
However, not everything is sunshine and rainbows.
MBM’s management has noted that one of Perodua’s tier-1 infotainment system suppliers is currently facing a semiconductor shortage issue.
One of Perodua’s major suppliers of infotainment systems is Betamek Bhd. However, RHB’s checks with the company indicated that Betamek is not experiencing any resurgent chip shortage for the time being.
“While further details are scarce at present, we will continue to monitor the issue, and are reassured that the said shortage is not expected to derail Perodua’s 314,000 sales target,” said Lim.
The group’s manufacturing segments also showed improvements during the quarter. Both of MBM’s subsidiaries – Oriental Metal Industries (M) Sdn Bhd and Hirotako Acoustics Sdn Bhd – registered higher sales volume in Q1 FY2023.
As a result, the majority of research houses have retained their “buy” call on the counter.
At 2.37pm, MBM’s share price was up 0.86% or 3 sen at RM3.48, giving it a market capitalisation of RM1.36 billion.