Affin Hwang raises target price for MBM Resources to RM3.70

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KUALA LUMPUR (Dec 14): Affin Hwang Capital Research has maintained “ Buy” on MBM Resources Bhd at RM2.12 with a higher target price of RM3.70 (from RM3.27) and said moving on from the failed takeover attempt by UMW Holdings, MBM Resources (MBM) will focus on: (i) reducing losses from its alloy wheel business and (ii) improving its financial position.

In a note today, the research house said in view of Perodua’s strong product line-up and positive consumer sentiment, it expects Perodua to deliver robust sales in 2019, thereby driving MBM’s associates’ earnings growth.

“We raise our EPS forecast by 14% for 2019-20E, and maintain our Buy with a higher target price of RM3.70 (from RM3.27).

“At 6x 2019E PER, MBM’s valuation is compelling,” it said.