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The Star
3 days ago
- Automotive
- The Star
Competition in EV space to intensify on policy shifts
PETALING JAYA: The automotive industry is approaching a structural inflection point with key policy shifts expected within the next six months, amid intensifying competition in the electric vehicle (EV) space, according to a research house. The government will need to decide by year-end whether to end the completely-built-up EV import tax exemptions and Approved Permit regime, said BIMB Securities Research. The decision will shape the competitive dynamics of the local EV market, either accelerating liberalisation and inviting more aggressive price competition or maintaining a controlled environment that protects local players. Those with strong exposure to electrification, efficient sourcing structures, and high local content will be best positioned to navigate the transition, said BIMB Research. While short-term demand risks persist, particularly from policy uncertainty and price volatility, credible reform execution could unlock medium-term growth and margin stability. It retained its 'neutral' stand on the sector with a positive bias, favouring original equipment manufacturers aligned with themes of affordability, EV adoption and localisation. It reiterated its 'hold' call on Sime Darby Bhd (with a target price of RM1.76 a share) and MBM Resources Bhd (RM4.30 a share). It kept its 'sell' on Bermaz Auto Bhd (65 sen a share). Despite all companies under its coverage having EV exposure, the research house liked Sime Darby for its robust EV portfolio (BYD, BMW) and resilient internal combustion engine (ICE) volumes via Perodua. This balanced mix would ensure defensive earnings amid market transition and positions Sime Darby as a structural winner in both the ICE and EV spaces. BYD slashed the price of its 2025 Atto 3 Ultra by RM44,000 to RM123,800, with a special launch offer of RM118,800 for early buyers, placing it in direct price parity with Proton's Emas 7 Premium (RM119,800). This move has reignited speculation of an impending EV price war. It favoured controlled growth, as it aligned with the government's clear policy direction. The extension of tax incentives for completely-knocked-down EV until end-2027 reinforced Malaysia's commitment to fostering local EV production, supply chain localisation and long-term industrial development, it said.
The Star
11-07-2025
- Business
- The Star
OPR cut beneficiaries
BIMB Securities Research said the lowering of the OPR to 2.75% is positive for sectors such as automotive, construction, technology, property and real estate investment trusts. PETALING JAYA: Bank Negara has pulled off a 'positive surprise', benefiting a number of sectors in Malaysia, following the decision to cut its overnight policy rate (OPR) two days ago. In a note, BIMB Securities Research said the lowering of the OPR to 2.75% is positive for sectors such as automotive, construction, technology, property and real estate investment trusts (REITs). Selective stocks within the consumer sector are also likely to benefit from lower interest rates. 'We had forecast an unchanged OPR of 3% – and we are glad to be proven wrong. 'This cut acts as a timely booster to support the current economic momentum. 'We view it as mildly supportive for domestic consumption, housing affordability, equity risk sentiment and a potential tailwind for exporters via a softer ringgit,' said BIMB Securities Research. On the automotive sector, the research house said a reduced OPR ensures cheaper hire purchase loans and this, in turn, supports the demand for mass-market vehicles. In the construction space, players are likely to enjoy better a funding cost outlook and improved internal rates of return on projects, apart from a stronger tender momentum. Technology stocks, on the other hand, would see export-oriented gains from a weaker ringgit and cheaper capital expenditures. It is noteworthy that the interest rate differential between Malaysia and the United States has widened post-OPR and this may weigh on the ringgit's upward momentum. As for the property sector, a lower OPR provides a mortgage affordability boost for buyers in the middle 40% income group. Meanwhile, REIT players will see an improved yield spread compared to the Malaysian Government Securities. On banking stocks, BIMB Securities Research said the impact is 'mildly positive', pointing out that banks with low current account-savings account proportion will benefit the most via slower cost passthrough. 'Net interest margin compression is uneven.' In a separate note, MIDF Research said one of the most 'immediate and visible' beneficiaries of an OPR cut are households. The OPR, as the benchmark interest rate, influences the cost of borrowing and the overall liquidity in the financial system. The reduced borrowing costs increase disposable income and potentially stimulate consumer spending. In addition, lower financing costs make home ownership more accessible. MIDF Research also pointed out that industries that rely heavily on consumer spending such as retail, automotive, hospitality and tourism are expected to be positively affected by an OPR cut. 'With increased disposable income and cheaper financing options, it may lead to consumers making discretionary purchases despite concerns about potential inflationary pressures. 'The property market is another major beneficiary of an OPR cut. 'Lower interest rates typically lead to increased demand for housing, particularly in the mid-range and affordable segments. 'Prospective buyers are more inclined to enter the market when mortgage rates are favourable, leading to higher transaction volumes. 'Developers, in turn, may accelerate project launches, anticipating improved sales and easier access to financing. 'The cut in the OPR is expected to lead to interest savings for developers. We estimate the earnings impact from interest savings to be below 2% for developers under our coverage,' it added. The research house also foresees REITs to benefit, as their yields become more attractive relative to fixed-income instruments.
The Star
10-07-2025
- Automotive
- The Star
BIMB Securities remains 'neutral' on EV adoption outlook
PETALING JAYA: The future of the electric vehicles (EV) market in the country looks promising as structural incentives and increasing ESG awareness provide a supportive backdrop for long-term electrification. But underinvestment in distribution infrastructure presents a structural bottleneck, said BIMB Securities Research. The absence of proactive upgrades in substations and feeder lines, particularly in high-density urban and legacy residential areas, continue to constrain home-charging scalability. Until grid resilience improves materially, EV uptake may remain biased towards landed homes or public charging networks, delaying broader adoption. In this context, BIMB said, it sees selective upside for contractors exposed to grid enhancement projects and power distribution assets, while turning cautious on EV original equipment manufacturers and charging infrastructure players with concentrated exposure to the residential segment. It retains its 'neutral' stance on both the automotive sector and Malaysia's EV adoption outlook. Within its coverage, it maintains 'hold' calls for Sime Darby Bhd and MBM Resources Bhd , while reiterating its 'sell' call on Bermaz Auto Bhd . Its target price for the three stocks are RM1.76, RM4.30 and 65 sen a share respectively. Despite offering EV models across the board, it continues to favour Sime Darby for its balanced exposure, anchored by strong EV traction from BYD and BMW, and resilient Internal Combustion Engine volumes via Perodua. This diversified product mix enables Sime Darby to ride both ends of the adoption curve, supporting earnings stability as the market transitions. In contrast, Bermaz Auto's narrower model range and higher premium bias limit its relative defensiveness in a more price-sensitive and infrastructure-constrained EV landscape. To ensure that EV adoption can scale sustainably, Malaysia must undertake several key actions, said BIMB. First, a comprehensive mapping and stress-testing exercise should be conducted to identify weak substations and prioritise them for upgrades. Secondly, it suggested, public-private funding mechanisms should be mobilised, particularly involving government-linked companies and institutional investors, to finance grid modernisation efforts. Thirdly, the development of a domestic battery recycling industry should be incentivised to manage end-of-life battery waste and enable second-life usage. Finally, the adoption of smart load management technologies should be encouraged, particularly for home and commercial EV chargers. These systems can balance power draw across time and location, reducing peak stress on the grid. It adds that Malaysia's current electricity generation capacity stands at 27,288MW, and is projected to rise to 40,000MW by 2029. However, generation is not the primary bottleneck, the real pressure point lies in the distribution segment. Substations and feeder lines, particularly in mature urban areas, are not equipped to support EV charging loads ranging from 11–20kW per household. The issue becomes more acute when multiple households charge their vehicles concurrently, resulting in localised demand spikes that risk overloading transformers and causing power disruptions.
The Star
19-06-2025
- Automotive
- The Star
Auto sector steady on firm demand, policy boost
BIMB Securities Research said the sector's near-term outlook remains balanced. PETALING JAYA: Malaysia's automotive sector continues to show resilience, with underlying demand holding firm and recent policy developments providing a short-term boost. Despite a monthly pickup in total industry volume (TIV), caution is advised amid external and competitive headwinds. According to BIMB Securities Research, the sector's near-term outlook remains balanced. Reiterating its 'neutral' call, the research house explained that its view on the automotive sector is supported by resilient underlying demand and favourable income policies. In a note, BIMB Securities Research highlighted expectations of new open market value duties potentially kicking in by 2026, which could act as a catalyst for early purchases and boost sales in the fourth quarter of 2025. TIV for May 2025 rose 12% month-on-month (m-o-m) to 68,007 units, driven by stronger passenger and commercial vehicle sales. Passenger vehicles climbed 12.1% m-o-m to 55,971 units, while commercial units increased by 15.2% to 5,250 units. However, year-to-date figures told a more muted story – sales slipped 5% to 316,737 units compared with the same period in 2024. BIMB Securities Research cautioned that several risks could dampen sentiment going forward. 'Key downside risks include global supply chain disruptions, softer consumer sentiment amid rising living costs, and competitive pressures from intensifying rivalry with Chinese original equipment manufacturers and the ongoing China electric vehicle (EV) price war,' it noted. Still, the research house believes current market jitters are not necessarily reflective of sector fundamentals. 'Although fundamentals remain robust, recent sell-offs appear largely sentiment-driven,' it noted. In terms of stock picks, BIMB Securities Research is reviewing its calls but has retained a 'neutral' stance on several key players. 'While our stock calls are currently under review, we maintain a 'hold' call on Sime Darby Bhd , MBM Resources Bhd and Bermaz Auto Bhd (BAuto),' the research house said. Its target price for Sime Darby stands at RM2.10, while that for MBM is at RM5.50 and 86 sen for BAuto. Statistics showed that national brands continued to dominate in May, with sales rising 11.7% m-o-m to 44,149 units. Perodua led with a 14.7% m-o-m gain, driven by strong demand for the Bezza and Myvi, while Proton saw a 4.9% uptick. Non-national marques also improved, up 13.6% m-o-m to 23,858 units. Toyota and Honda led the charge, but Mazda saw a 14% drop. EV momentum is gaining traction, though adoption remains well below national targets. 'Malaysia's EV registrations rose 44% m-o-m to 4,152 units in May 2025,' BIMB Securities Research noted, citing Road Transport Department data. Tesla's new Model Y facelift boosted sales 10-fold to 1,075 units, while BYD remained the top performer with 1,148 units. That said, with EV penetration at just 4.1%, the road to 20% by 2030 remains long, BIMB Securities Research noted.
The Star
19-06-2025
- Business
- The Star
Glove sector hit by soft demand and higher costs
BIMB Securities Research cautioned that the second half of 2025 will likely see flat sales volumes and stagnant average selling prices. PETALING JAYA: The outlook for Malaysia's rubber gloves sector is not looking very positive at the moment, according to BIMB Securities Research. In a report, it cautioned that the second half of 2025 (2H25) will likely see flat sales volumes and stagnant average selling prices (ASPs). 'ASPs are expected to show minimal improvement, remaining flat amid global oversupply and persistent price undercutting by Chinese glove manufacturers in non-US markets,' the research house said. Adding to the pressure, Chinese companies are relocating parts of their production to South-East Asia – Indonesia, Vietnam and Cambodia – to circumvent tariffs while maintaining cost competitiveness. Given this competitive landscape and weak US demand momentum, the research house said meaningful price recovery appears unlikely. After frontloading activities by US customers in January and February, BIMB Securities Research said order volumes have since slowed amid inventory buildup. 'Looking ahead to 2H25, we anticipate only a small increase in demand as customers remain cautious amid ongoing tariff uncertainties,' the research house said. It said minimum wage hikes have raised labour costs, and despite easing natural gas prices, profitability remains fragile. With that, the research house has maintained its 'neutral' call on the sector, citing structural issues and global trade uncertainties, with limited upside catalysts. 'We have a 'hold' on Hartalega Holdings Bhd , Kossan Rubber Industries Bhd and Top Glove Corp Bhd and 'non-rated' for Supermax Corp Bhd ,' it added.
