MBM Resources Bhd faces a mixed outlook for the upcoming quarter amid anticipated production adjustments at Perusahaan Otomobil Kedua Sdn Bhd (Perodua) and initial losses from its Smart Mobility plant. During a recent briefing on its second-quarter results for 2026, the automotive group indicated that slower output from Perodua could temper growth as the carmaker retools production lines to accommodate new models.
Perodua’s July sales demonstrated a 16% increase month-on-month to 31,842 units, but management expects a normalization of sales figures in the third quarter due to a temporary reduction in production capacity. This slowdown is partly attributed to shifting assembly lines toward new vehicles, including the Perodua Ativa Hybrid and the Perodua Myvi. Additionally, extended public holidays in August and September are projected to impact manufacturing schedules.
MBM Resources also cautioned that the national carmaker’s Smart Mobility plant is likely to incur startup losses in the second half of its 2026 financial year as production scales gradually. Despite close to 2,000 bookings recorded by August 2026, commercial output remains below 100 units per month, hampered by suppliers’ inability to consistently meet quality standards. Industry watchers noted that this underperformance, combined with a lukewarm market response and constrained supply, could extend the losses into 2027 or until Perodua introduces new electric vehicle models better aligned with customer preferences.
The group acknowledged challenges from an automotive parts supply disruption beginning April 2026, linked to the broader Middle East conflict. While the supply of raw materials has remained stable, rising logistics costs are expected to increase prices, potentially affecting end consumers.
Despite these headwinds, MBM Resources anticipates steady growth in associate contributions, particularly from its 23% stake in Perodua. The order backlog remains healthy at roughly 35,000 to 40,000 units, though this figure has declined from 60,000 units earlier in the year. Sales momentum in the dealerships business is expected to continue, bolstered by the introduction of new models.
The group’s Jaecoo dealership, in particular, has delivered improved margins compared to other brands, with first-half 2026 sales up 24% year-on-year to 181 units. However, management noted increasing competition among Jaecoo dealers. Research firms pointed out that Jaecoo experienced a significant 49.2% year-on-year decline in unit sales during the second quarter, attributed to aggressive discounting by rival dealers.
Analysts forecast MBM Resources’ earnings to remain relatively stable despite anticipated moderation in Perodua’s overall sales from the 359,904 units recorded in the previous year. Foreign-exchange gains and steady Perodua volumes contributed to a resilient second-quarter performance. One research house reaffirmed a “buy” rating on the stock with a target price of RM6.14, highlighting an attractive dividend yield of 8.1% and valuation metrics that suggest the stock is trading below historical averages. Meanwhile, another maintained a “market perform” stance with an unchanged target price of RM5, citing the company’s strong earnings visibility supported by the Perodua order backlog and significant market presence.