Bezza factor buoys optimism about Perodua’s 2016-18 sales potential

By THE STAR | 19 July 2016

KUALA LUMPUR: Maybank IB Research is raising the sales forecasts of Perusahaan Otomobil Kedua Sdn Bhd (Perodua) for the calendar year (CY) 2016 to 2018 due to the automaker’s successful launch of its latest model - Perodua Bezza.

Towards this end, the research house said today it was raising 2016, 2017 and 2018 sales forecasts for Perodua to 225,000, 250,000 and 240,000 units from 220,000, 217,000 and 205,000 respectively.

With this higher sales projections, the research outfit added it would also lift Perodua Bezza’s beneficiaries earnings forecast for financial year 2016 - 2018 like UMW Holdings Bhd, MBM Resources Bhd and Pecca Group Bhd by 1%-12%.

“In terms of exposure to Perodua, we believe that MBM is the largest with Perodua being a 22.6%-owned associate which accounts for 80%-85% of MBM’s bottomline. We estimate about 10-11% of Perodua cars sold in Malaysia are via MBM’s DMM Sales , auto parts supplies (i.e. seatbelts, airbags and wheels) via Hirotako and OMI, both under MBM.

“Pecca benefits as the sole supplier of leather car seat covers to the automaker while UMW sees positive exposure from its 38%-stake in Perodua itself,’’ it noted.

Maybank IB said MBM is now a buy with a higher target price (TP) of RM2.70, while Pecca/UMW remain as buy/sell with higher TPs of RM1.95/4.65 respectively.

Perodua expects to sell close to 8,000 units of Bezza per month in 2016, 38,000 units for the remaining five months of this year. Conservatively, the research house has raised the sales volume
forecasts for this model to 30,000, 84,000, 70,000 units from 15,000, 30,000 and 25,000 in CY16/17/18.

However, the brokerage’s total CY16/17/18 Perodua vehicle sales forecasts are only raised by 2%-17% as it account for some cannibalisation in the Myvi model as well as slower sales of the dated-Alza model.

Built in Perodua’s new plant (75% automation) in Serendah, the Bezza is 95% localized (thus, only 5% of parts are subject to forex fluctuation) and qualified as an Energy Efficient Vehicle (EEV) for its fuel efficiency (21-22km/litre of petrol; more than 700km per full tank).

For the top range 1.3L advance variant, the car would also be equipped with features comparable to entry-level Japanese/continental sedan models (i.e vehicle stability control, brake sssist, traction control, hill start assist).

Coupled with other attractive features, this competitively-priced Bezza model is a threat to Proton’s sedan offerings. Saga, Iriz and Persona combine, made up about 70,000-75,000 units of Proton’s 102,000 sales in 2015, Maybank IB said.