DRBHCOM’s 9MFY23 results met expectations said Kenanga, the group’s core net profit rose 5% YoY driven by strong Proton vehicles sales and better distribution margins from new models, coupled with an improved performance from Bank Muamalat. The house said these more than offset weaker earnings from Honda Malaysia.
The automotive group’s results met expectations at 75% of both Kenanga’s full-year forecast and the full-year consensus estimate. YoY, its 9MFY23 revenue rose 8% YoY driven by automotive sales led by Proton at 114,806 units, Mitsubishi at 16,521 units, and Isuzu at 12,572 units, services segment and higher financing income from Bank Muamalat. These
more than offset the weakening sales from aerospace & defence due to lower delivery of defence products despite improving
aviation sector, and postal due to deteriorating operating environment.
However, its net profit only rose 5% on a reduced share of associates’ profit from 34%-owned Honda Malaysia due to a weaker sales volume (-10% to 54,017 units). QoQ, its 3QFY23 revenue was flattish as a stronger contribution from
aerospace & defence (+10%) from improving aviation sector, higher financing income from Bank Muamalat (+6%), and services segment (+2%), negated the flattish automotive sales due to aggressive promotion by the competitors, and weak postal segment (- 1%). Its net profit soared by a larger 95% driven by improved overall distribution margins underpinned by high-margin new models, i.e. X50, X90, and Honda City, a slight jump in the share of associates’ profits (+2%) driven by 34%-owned Honda Malaysia on improving sales volume (+25% to 20,290 units), and a strong showing from Bank Muamalat.
The house maintains its forecasts on the group with a TP at RM1.45.
