KUALA LUMPUR, Nov 29 (Bernama) -- RHB Investment Bank Bhd has raised its financial year 2025 and 2026 (FY2025–FY2026) earnings forecasts for Sime Darby Bhd by two per cent to account for an upward revision of its 2025 Perodua sales volume assumption to 330,000 units from 310,000 units.
Following the improved earnings outlook, the investment bank maintained its 'buy' call on Sime Darby with a higher target price (TP) of RM3.15.
“In Malaysia, the motor segment is expected to remain strong, driven by an anticipated uptick in electric vehicle (EV) sales ahead of the tax holiday's expiration at the end of 2025. Perodua continues to be Malaysia’s preferred car brand,” the bank said in a research note today.
Similarly, CIMB Securities Sdn Bhd expects Perodua to sustain a healthy sales momentum in the fourth quarter of 2024 (4Q 2024), supported by a robust backlog of around 100,000 orders as of September 2024.
“We project Perodua sales volume to grow by eight per cent year-on-year (yoy) to 355,000 units in 2024 versus 336,000 units previously.
‘We believe a gradual recovery in Sime Darby’s China motors division, resilient mining demand in Australia, and a growing market share in the Malaysian automotive market will drive Sime Darby’s FY2025 earnings growth," it said.
CIMB Securities maintains its earnings forecast and 'buy' rating for Sime Darby with an unchanged TP of RM3.00.
Meanwhile, Public Investment Bank Bhd took a more cautious stance on Sime Darby’s outlook.
“Challenging business conditions in China are expected to persist, exacerbated by ongoing price wars. In Malaysia, motor vehicle demand is expected to soften due to anticipated fuel subsidy rationalisation and the introduction of a high-value goods tax.
“Additionally, the influx of China's original equipment manufacturer and competitive pricing may intensify market competition, further squeezing profit margins and limiting earnings growth,” the bank said.
Despite these challenges, Public Investment noted that the robust performance of Sime Darby’s industrial division in Australasia, Malaysia, and Singapore is likely to offset the weakness in its China operations.
Public Investment retained its earnings forecasts and maintained a 'neutral' call on Sime Darby, with an unchanged sum-of-parts-based TP of RM2.45.
-- BERNAMA
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