Automotive




The Edge weekly reported that the upcoming National Automotive Policy (NAP) policy will introduce incentives for car manufacturers to develop "home-grown models" in an attempt to attract more value-added investments, especially in product development, from foreign car manufacturers. Industry sources say the government is trying to shift its automotive policy whereby the emphasis will no longer be on keeping a strict division between national carmakers Proton and Perodua, and non-national players such as the Naza Group, UMWToyota,
Honda Malaysia and others.


Maintain OVERWEIGHT on sector. We continue to retain our OVERWEIGHT recommendation for the auto sector, backed by the stronger than expected vehicle sales, as well as the potential of further liberalisation of the sector, which may bring in more foreign partnerships. Our calls across our coverage are BUYs (Proton: TP RM5.10, MBM: TP RM2.87, TCHONG: TP RM2.35, NHFATT: TP RM2.22) while UMW and EPMB are retained as SELL, with target prices of RM4.71 and RM0.32 respectively.