KLCI Stock - MBMR / 5983 - 2010 Quarter 1

MBM RESOURCES BERHAD

Listing Date: 16.02.1994
Market: MAIN
Sector: TRADING/SERVICES
Par Value: 1.00
Major Industry: Miscellaneous
Sub Industry: Wholesalers
Market Cap : 242169667*2.78 = 673,231,674.26 (Small)
NTA per share : 926075/245508 = 3.77
P/BV : 2.78/3.77 = 0.7374 (Undervalue)
Forecast P/E now : (2.78-0.06)/0.4772 = 5.7 (Low)
ROE : 9.42% (Low)
DY : 0.06/2.78*100 = 2.16% (Low)
Fixed Asset Turnover(3 year) : (1.0703+1.1092+1.0627)/3 = 1.0807 (High)
Liquidity Ratio : 456330/137929 = 3.3084 (High)
Receivables Collection Period : (97806+87535)/2/(1304966/365) = 25 days (Good)
My Target Price : 3.82+0.06 = 3.88 (EPS 0.4772, PE 8, DPS 0.06)
My Decision : BUY
My Comment : Revenue and profit recovered, normal cash flow, low debt, navps increasing
Technical Support Price : 2.6, 2.5
Risk Rating : MODERATE
OSK Target Price : 3.54 (17 March 10)

MBM RESOURCES BERHAD is an investment holding company. The Company’s operating businesses are organized into three business segments: investment holding; marketing and distribution of motor vehicles and other related activities, and manufacturing of automotive parts, trucks and vehicles body building and other related activities. It operates through several subsidiaries. Its subsidiaries include Daihatsu (Malaysia) Sdn Bhd (DMSB), which is engaged in the marketing and distribution of motor vehicles, spare parts and provision of related motor repair services; Summit Vehicles Body Works Sdn. Bhd., which is engaged in trucks and vehicles body building and general engineering works, and Galaxy Waves Sdn. Bhd. whichis engaged in investment holding. On March 31, 2007, it acquired a 16.35% interest in Federal Auto Holdings Berhad (FAHB), which increased its interest in FAHB to 86%. In August 2008, it disposed Auto Style Enterprise Limited and Sun Motors Limited to Med-Bumikar Mara Sdn. Bhd.

My notes based on 2010 quarter 1 report (number in '000):-
- Recovery in the auto industry gathered pace with total industry volume (TIV) improving 6.1% over the preceding quarter and year‐on‐year expansion of 24.2%
- The Ringgit strengthened against the Yen, resulting in an improvement in operating margins
- Robust demand for the commercial and passenger vehicles under the Group and contribution from the new dealerships resulted in substantial gains in revenue and profitability
- The manufacturing subsidiaries also continued to benefit from the rise in TIV
- Profit for the period recovered substantially from a low base in Q1 2009
- Estimate next 4Q eps after 2010 Q1 result announced = 0.4772 (base on year 2008 eps), estimate PE on current price 2.78 = 5.7(DPS 0.06)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0931*4 = 0.3724, estimate highest/lowest PE = 7.09(DPS 0.06)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0916*4 = 0.3664, estimate highest/lowest PE = 7.21/6.39 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0568*4 = 0.2272, estimate highest/lowest PE = 10.65/8.98 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0381*4 = 0.1524, estimate highest/lowest PE = 14.37/12.6 (DPS 0.18)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.0672*4 = 0.2688, estimate highest/lowest PE = 8.59/6.58 (DPS 0.18)

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