MBM Resources Bhd’s (MBMR) share price is expected to reach up to LT target of RM5.10, as its 3Q23 earnings rebounded from a weaker 2Q23 on the back of healthy near-term vehicle demand for Perodua, according to Malacca Securities Sdn Bhd.
“MBMR’s share price has experienced a flag breakout around RM4.62. As the technical readings are positive, we expect follow-through buying interest to be seen in the near term, targeting RM4.95 to RM5, with a LT target at RM5.10.
“Support is set around RM4.45 to 4.50, with a cut loss set around RM4.40,” it said in its Technical Focus today (Feb 19).
The independent research house said MBMR’s 3Q23 earnings rebounded from a weaker 2Q23 on the back of stronger revenue from better associates’ performance and the one-off gain on the disposal of a vacant land.
“In 3Q23, MBMR has achieved a net profit of RM115 million from RM68.7 million, a 67.3% increase year-on-year (YoY) and RM58.4 million, a 96.7% rise quarter-on-quarter (QoQ).”
Malacca Securities said the automotive player anticipated the demand for vehicle sales and manufacturing volume should remain healthy for the remainder of the year.
“This is due to Perodua’s to date order bank and original equipment manufacturer (OEM) stronger projected production volume.
Additionally, MBMR projected to distribute dividends at annual total of 46 sen, which represents an attractive dividend yield of 9.9%, according to Bloomberg,” it added.
