Needs a good NAP. Proton, TCM now Sells. Total industry volume (TIV) still sluggish. Mar ‘09 and 1Q09 TIV contracted 5% and 9% YoY as expected, reflecting the adverse impact from the economic slowdown and tighter financing environment. We expect weaker performance ahead, with 2009’s TIV to contract 15-20% YoY. We recommend investors to Sell Proton and TCM. Mar ‘09 TIV grew 21% MoM on low Feb base… Mar 09’s TIV of 44,205 units (+20.5% MoM) was in line, with both the commercial and passenger segments growing by 24.2% and 20.2% MoM respectively. All major marques enjoyed higher MoM sales with non-nationals Honda and Toyota achieving stronger growth (+33-34% MoM) compared to national models Proton and Perodua (+9-17% MoM). YoY performance still down. Mar ‘09 TIV fell 4.8% YoY and 1Q09 TIV fell 9.3%. Market share-wise, the Honda and Perodua marques grew 3.4-ppt YoY and 1.6-ppt YoY in Jan-Mar ‘09 at the expense of Toyota (- 3.9-ppt YoY) and Proton (-1.7-ppt YoY). 2009 is set to be a tough year. We expect TIV to fall by 15-20% YoY to 438,000-465,000 units, due to fewer new model launches, tougher economic conditions and tighter financing environment. We understand that loan applications and approvals have dropped significantly particularly for Proton cars. A further dampener is the 85-100 bps hike in Hire Purchase (HP) rates on non-national cars in Apr ‘09. Downgrade Proton and TCM to Sell. The industry expects a new National Automotive Policy (NAP) to be revealed soon but we are doubtful whether it will address Proton’s long term competitiveness. We downgrade Proton to Sell (from Trading Buy) following the 68% share price appreciation since our Jan ‘09 upgrade as well as anticipation of a poor 4Q09 result, to be announced next month. We also downgrade TCM to Sell (from Hold) as the share price has breached our TP.

1. Equity Research
PP11072/03/2010 (023549)
Sector update 23 April 2009
Needs a good NAP. Proton, TCM now
Autos (Underweight) Sells.
Total industry volume (TIV) still sluggish. Mar ‘09 and 1Q09 TIV
Wong Chew Hann, CA
contracted 5% and 9% YoY as expected, reflecting the adverse impact
wchewh@maybank-ib.com
from the economic slowdown and tighter financing environment. We
(603) 2297 8688
expect weaker performance ahead, with 2009’s TIV to contract 15-20%
Snapshot of auto sales data YoY. We recommend investors to Sell Proton and TCM.
Mar ‘09 TIV grew 21% MoM on low Feb base… Mar 09’s TIV of
Mar 09 % chg % chg YTD % chg
(unit) MoM YoY (unit) YoY 44,205 units (+20.5% MoM) was in line, with both the commercial and
passenger segments growing by 24.2% and 20.2% MoM respectively.
TIV 44,205 20.5 -4.8 118,681 -9.2
All major marques enjoyed higher MoM sales with non-nationals
Passenger 39,989 20.2 8.2 107,593 2.2
Honda and Toyota achieving stronger growth (+33-34% MoM)
Commercial 4,216 24.2 -55.6 11,088 -56.6
compared to national models Proton and Perodua (+9-17% MoM).
National 24,468 13.6 -7.4 67,751 -9.4 YoY performance still down. Mar ‘09 TIV fell 4.8% YoY and 1Q09 TIV
Non-national 19,737 30.3 -1.4 50,930 -9.0
fell 9.3%. Market share-wise, the Honda and Perodua marques grew
3.4-ppt YoY and 1.6-ppt YoY in Jan-Mar ‘09 at the expense of Toyota (-
Marque
3.9-ppt YoY) and Proton (-1.7-ppt YoY).
Proton 10,176 9.2 -22.0 29,367 -15.0
Perodua 14,292 17.0 6.9 38,384 -4.6 2009 is set to be a tough year. We expect TIV to fall by 15-20% YoY
Toyota 7,113 32.5 -23.7 17,313 -28.4 to 438,000-465,000 units, due to fewer new model launches, tougher
Honda 2,445 2.3 3.9 7,119 4.0 economic conditions and tighter financing environment. We understand
Nissan 3,904 33.7 55.2 10,638 46.1
that loan applications and approvals have dropped significantly
particularly for Proton cars. A further dampener is the 85-100 bps hike
Mkt share Mar 09 ppt chg ppt chg YTD % chg
in Hire Purchase (HP) rates on non-national cars in Apr ‘09.
(%) MoM YoY (unit) YoY
Passenger 90.5 -0.2 10.9 90.7 10.2 Downgrade Proton and TCM to Sell. The industry expects a new
Commercial 9.5 0.2 -10.9 9.3 -10.2 National Automotive Policy (NAP) to be revealed soon but we are
doubtful whether it will address Proton’s long term competitiveness. We
National 57.1 -3.4 -1.5 57.1 -0.1
downgrade Proton to Sell (from Trading Buy) following the 68% share
Non-national 42.9 3.4 1.5 42.9 0.1
price appreciation since our Jan ‘09 upgrade as well as anticipation of a
poor 4Q09 result, to be announced next month. We also downgrade
Marque
TCM to Sell (from Hold) as the share price has breached our TP.
Proton 23.0 -2.4 -5.1 24.7 -1.7
Perodua 32.3 -1.0 3.5 32.3 1.6
Toyota 16.1 1.5 -4.0 14.6 -3.9
Honda 5.5 -1.0 0.5 6.0 0.8
Nissan 8.8 0.9 3.4 9.0 3.4
Source: MAA
Auto sector: Comparative valuations
Company Rec Price TP EPS (sen) PER (x) Div Yield (%) P/NTA (x)
(RM) (RM) 09F 10F 09F 10F 09F 10F
MBM FV 2.35 2.40 31.9 48.1 7.4 4.9 5.5 6.0 0.6
Tan Chong Sell 1.41 1.05 17.8 17.9 7.9 7.9 3.5 3.5 0.6
UMW Hold 5.50 5.70 34.2 42.2 16.1 13.0 4.3 5.4 1.5
Proton* Sell 3.00 2.50 32.5 29.6 9.2 10.2 3.3 3.3 0.3
Source: Maybank-IB, * calendarised

2. Auto
Total Industry Volume
60,000
Passenger Vehicle Commercial Vehicle
50,000
40,000
30,000
20,000
Mar‐07 Jul‐07 Nov‐07 Mar‐08 Jul‐08 Nov‐08 Mar‐09
Source: MAA, Maybank-IB
USD-RM Movement
3.80 3.72
3.64
3.70
3.60
3.46 3.45
3.45 3.44
3.50
3.41
3.40
3.31
3.27
3.30
3.20
3.20
3.10
3.00
22-Apr
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
Source: MAA, Maybank-IB
JPY-RM Movement
4.00
3.83
3.70
3.80
3.65
3.60
3.40 3.27
3.21
3.10
3.20
2.95 2.95
2.93
3.00
2.80
2.80
2.60
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
22-Apr
Source: MAA, Maybank-IB
23 April 2009 Page 2 of 4

3. Auto
Auto Sector Summary (Quarterly)
Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08
PROFIT AND LOSS BALANCE SHEET
Revenue (RM’m) Gross Cash (RM’m)
- MBM Resources - MBM Resources
271.9 267.8 307.1 314.9 260.9 110.8 119.9 147.6 140.7 124.9
- Tan Chong Motors - Tan Chong Motors
441.8 759.6 783.8 1002.5 650.0 81.9 115.8 100.1 115.9 76.2
- UMW Holdings - UMW Holdings
2689.8 2985.1 3568.2 3326.2 2918.4 1553.4 1347.2 1648.9 1573.4 1499.7
- Proton - Proton
1454.9 1724.6 1708.8 1838.5 1537.3 985.0 1226.0 1386.4 1434.6 1172.8
EBIT (RM’m) Gross Debt (RM’m)
- MBM Resources - MBM Resources
15.9 21.6 19.1 23.0 10.1 45.0 37.4 35.7 32.0 36.9
- Tan Chong Motors - Tan Chong Motors
37.1 70.1 86.3 117.7 43.02 454.1 431.3 387.0 361.6 569.4
- UMW Holdings - UMW Holdings
268.2 237.8 306.8 295.4 224.7 295.2 341.3 432.4 467.4 571.0
- Proton - Proton
9.0 189.2 57.6 52.7 -58.7 485.9 244.5 242.0 255.6 295.5
Pretax profit (RM’m) Net Cash (RM’m)
- MBM Resources - MBM Resources
30.1 51.5 36.7 42.6 19.5 65.8 82.5 111.9 108.7 88.0
- Tan Chong Motors - Tan Chong Motors
34.0 67.1 84.0 115.7 40.4 -372.2 -315.5 -287.0 -245.6 -493.2
- UMW Holdings - UMW Holdings
315.6 292.9 355.0 353.8 269.9 1258.2 1005.9 1216.5 1105.9 928.7
- Proton - Proton
11.0 193.1 58.7 56.6 -60.9 499.1 981.6 1144.4 1179.0 877.2
Net profit (RM’m) Shareholders fund (RM’m)
- MBM Resources - MBM Resources
22.6 42.8 25.7 32.2 16.7 759.8 798.1 825.8 834.6 851.3
- Tan Chong Motors - Tan Chong Motors
31.9 54.1 68.1 95.4 28.2 1232.6 1286.8 1330.1 1399.7 1421.5
- UMW Holdings - UMW Holdings
143.0 141.8 151.7 152.7 116.1 3130.1 3279.7 3339.4 3410.2 3522.9
- Proton - Proton
10.3 236.4 52.0 43.8 -74.7 5198.6 5443.0 5480.8 5520.2 5387.9
PROFIT RATIO
EBIT margins (%) NTA / Share (RM)
- MBM Resources - MBM Resources
5.8 8.1 6.2 7.3 3.9 3.05 3.20 3.31 3.34 3.41
- Tan Chong Motors - Tan Chong Motors
8.4 9.2 11.0 11.7 6.6 1.85 1.93 1.99 2.10 2.15
- UMW Holdings - UMW Holdings
10.0 8.0 8.6 8.9 7.7 5.83 2.94 3.00 3.01 3.07
- Proton - Proton
0.6 11.0 3.4 2.9 -3.8 9.01 9.36 9.36 9.39 9.10
Pretax margins (%) Inventories
- MBM Resources - MBM Resources
11.1 19.2 12.0 13.5 7.5 101.2 117.2 108.8 98.8 146.8
- Tan Chong Motors - Tan Chong Motors
7.7 8.8 10.7 11.5 6.2 583.3 579.2 603.1 627.4 854.4
- UMW Holdings - UMW Holdings
11.7 9.8 9.9 10.6 9.2 1048.9 1317.6 1385.0 1358.0 1464.0
- Proton - Proton
0.8 11.2 3.4 3.1 -4.0 1282.1 1090.3 1162.6 1215.5 1391.3
Net profit margins (%) Trade Receivables
- MBM Resources - MBM Resources
8.3 16.0 8.4 10.2 6.4 114.1 104.3 104.5 98.9 91.2
- Tan Chong Motors - Tan Chong Motors
7.2 7.1 8.7 9.5 4.3 307.7 310.9 310.4 111.2 280.2
- UMW Holdings - UMW Holdings
5.3 4.7 4.3 4.6 4.0 657.8 782.7 734.1 753.0 802.7
- Proton - Proton
0.7 13.7 3.0 2.4 -4.9 884.6 1022.2 835.4 739.1 776.2
CASH FLOW CASH FLOW
Operating (RM’m) Financing (RM’m)
- MBM Resources - MBM Resources
4.2 3.4 18.5 29.7 -21.2 -24.9 -15.3 -5.1 -28.4 -0.9
- Tan Chong Motors - Tan Chong Motors
-33.0 89.1 65.5 67.6 -180.9 64.5 -22.9 -68.9 -50.5 200.7
- UMW Holdings - UMW Holdings
264.0 -77.6 292.4 275.8 56.8 -146.1 -57.4 190.7 -71.9 10.2
- Proton - Proton
267.9 1028.8 -769.7 164.6 -158.4 112.9 101.0 -97.1 48.6 72.4
Investing (RM’m)
- MBM Resources -0.8 23.9 17.3 -9.6 4.3
- Tan Chong Motors -65.4 -20.4 -12.3 -0.6 -60.3
- UMW Holdings -24.3 -84.8 -192.8 -268.5 -174.9
- Proton -131.0 -427.2 325.7 -124.0 -160.9
Source: Companies, Maybank-IB
23 April 2009 Page 3 of 4

4. Auto
Definition of Ratings
Maybank Investment Bank Research uses the following rating system:
STRONG BUY Total return is expected to exceed 20% in the next 12 months; high conviction call
BUY Total return is expected to be above 10% in the next 12 months
HOLD Total return is expected to be between above 0% to 10% in the next 12 months
FULLY VALUED Total return is expected to be between -10% and 0% in the next 12 months
SELL Total return is expected to be below -10% in the next 12 months
TRADING BUY Total return is expected to be between 10-20% in the next 6 months arising from positive newsflow e.g. mergers and
acquisition, corporate restructuring, and potential of obtaining new projects. However, the upside may or may not be
sustainable
Applicability of Ratings
The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are
only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not
carry investment ratings as we do not actively follow developments in these companies.
Some common terms abbreviated in this report (where they appear):
Adex = Advertising Expenditure FCF = Free Cashflow PE = Price Earnings
BV = Book Value FV = Fair Value PEG = PE Ratio To Growth
CAGR = Compounded Annual Growth Rate FY = Financial Year PER = PE Ratio
Capex = Capital Expenditure FYE = Financial Year End QoQ = Quarter-On-Quarter
CY = Calendar Year MoM = Month-On-Month ROA = Return On Asset
DCF = Discounted Cashflow NAV = Net Asset Value ROE = Return On Equity
DPS = Dividend Per Share NTA = Net Tangible Asset ROSF = Return On Shareholders’ Funds
EBIT = Earnings Before Interest And Tax P = Price WACC = Weighted Average Cost Of Capital
EBITDA = EBIT, Depreciation And Amortisation P.A. = Per Annum YoY = Year-On-Year
EPS = Earnings Per Share PAT = Profit After Tax YTD = Year-To-Date
EV = Enterprise Value PBT = Profit Before Tax
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23 April 2009 Page 4 of 4