KUALA LUMPUR (Nov 23): MBM Resources Bhd (MBMR) shares jumped 9.63% this morning after it posted a more-than-fivefold jump in net profit to RM38.1 million for its third quarter ended Sept 30, 2018 (3QFY18), and indicated earnings could have been even better if not for a supply shortage.

At 9,01am, MBMR rose 18 sen to RM2.05 with 226,900 shares done.

However, revenue was only marginally higher at RM472.4 million, from RM466.8 million a year ago.

Owing to the surge in 3Q sales, its cumulative nine-month net profit (9MFY18) more than doubled to RM105.46 million from RM42.91 million in the previous corresponding period. Revenue rose to RM1.42 billion from RM1.28 billion.

Meanwhile, Hong Leong IB Research maintained its “buy” rating on MBMR at RM1.87 with a higher target price of RM3.13 (from RM3.04) and said MBMR’s 9M18 core earnings of RM109 million (+94.1% year-on-year) came in above house expectation, accounting for 89.9% and 89% of its and consensus full year forecast respectively.

In a note today, the research house said the upward surprise was mainly due to higher-than-expected subsidiary and associates automotive sales volume attributed to GST zerorisation and higher demand from auto parts segment.

“We increased our FY18, FY19 and FY20 earnings forecast by 17.1%, 7.5% and 6.5% respectively after imputing higher Perodua sales volume.

“We maintain 'buy' on MBMR with higher target price of RM3.13 (from RM3.04) based on 20% discount to SOP RM3.92,” it said.