Malaysia Sector Update 23 October 2019 Consumer Cyclical | Auto & Autoparts Auto & Autoparts Neutral (Maintained) Notable Winners: Proton, Perodua, And Volvo Stocks Covered 7 Ratings (Buy/Neutral/Sell): 4 / 3 / 0 Last 12m Earnings Neutral Revision Trend: Stay NEUTRAL. Malaysian Automotive Association’s (MAA) September Top Pick Target data shows that TIV declined 12.7% MoM as consumers held back purchases DRB-HICOM (DRB MK) – BUY MYR3.3price0 in anticipation of Budget 2020 announcements. We expect TIV to recover in October. Proton, Perodua and Volvo recorded YTD growth in sales volume, bucking the broad market decline. Uncertainty over macroeconomic Analysts conditions will likely benefit brands with lower-priced cars, eg Proton and Perodua. Our Top Pick: DRB-HICOM. Muhammad Afif Bin Zulkaplly Sales held back by Budget 2020 uncertainty. According to data from the +603 9280 8883
[email protected] MAA, TIV was at 44,666 units (+43% YoY, -12.7% MoM) in September. The monthly drop was mainly due to consumers holding back purchases, and adopting a wait-and-see approach prior to Budget 2020. YTD (9M19) auto sales of 442,991 units (-2.6% YoY) are on track to meet our 2019 forecast of 600,000 units (MAA: 600,000 units), with the anticipation of year-end promotions being held to spur sales. Proton and Perodua continued to buck market trends. Proton sales YTD-2019 market share by marque continued to be fuelled by the delivery of the recently-launched facelifted YTD 2019 Proton Saga. Proton received 20,000 bookings and has delivered Others Proton 12.5% 15.8% approximately 8,000 units since the model was launched in August.