Losing speed. The persistent weakness in TIV which extended into Apr, reaffirms our depressing view of the sector. Overall, we expect 2009’s TIV to contract 15-20% YoY. An effective NAP is essential to reverse the slide. Until then, the auto sector remains an Underweight. TIV continues to drift lower. Apr’s TIV of 41,135 units continued to slide, down 7% MoM and 18% YoY. The sequential drop in vehicle sales was greater on national marques (-10% MoM) vis-à-vis nonnationals (-3% MoM). Perodua suffered the biggest drop in sales (-14% MoM) and market share (-2.5% MoM) but was still capable of retaining its No.1 status in the industry with a 30% market share. YTD’s TIV down 12% YoY. Other major marques – Toyota, Proton and Honda too reported weaker sales (-3%, -4%, -12% MoM respectively). Only Nissan (+2% MoM) showed a 3% rise in sales, spurred on by its MPV Grand Livina model (+9%). YTD, TIV fell 12% YoY to 159,816 units, accounting for 35% of our estimates of 438,000-465,000 units. We expect TIV to contract 15-20% for 2009, as the sector continues to suffer from an absence of new model launches and a stricter financing environment. Reject rates for Proton’s applicants remain high whilst the 85-100bps hike in Hire Purchase (HP) rates on non-national cars will further dampen sales. A good NAP is needed to wake the sector up. The National Automotive Policy (NAP), which will be revealed by 3Q09, needs to boldly address among others: (i) consolidation of national marques and vendors, and (ii) issues on Approved Permits (APs). A pro-active guideline will help shape the sluggish sector. Until then, we maintain our Underweight call, with Sell calls on Proton and Tan Chong.

1. Equity Research
PP11072/03/2010 (023549)
Sector Update 20 May 2009
TIV still drifting down; Maintain
Autos Underweight.
Underweight (unchanged) Losing speed. The persistent weakness in TIV which extended into
Wong Chew Hann, CA Apr, reaffirms our depressing view of the sector. Overall, we expect
wchewh@maybank-ib.com 2009’s TIV to contract 15-20% YoY. An effective NAP is essential to
(603) 2297 8688 reverse the slide. Until then, the auto sector remains an Underweight.
TIV continues to drift lower. Apr’s TIV of 41,135 units continued to
Snapshot of auto sales data
slide, down 7% MoM and 18% YoY. The sequential drop in vehicle
Apr 09 % chg % chg YTD % chg
(unit) MoM YoY (unit) YoY sales was greater on national marques (-10% MoM) vis-à-vis non-
nationals (-3% MoM). Perodua suffered the biggest drop in sales (-14%
TIV 41,135 -6.9 -18.2 159,816 -11.8
MoM) and market share (-2.5% MoM) but was still capable of retaining
Passenger 37,259 -6.8 -7.2 144,852 -0.4
its No.1 status in the industry with a 30% market share.
Commercial 3,876 -8.1 -61.8 14,964 -58.1
YTD’s TIV down 12% YoY. Other major marques – Toyota, Proton and
National 22,075 -9.9 -24.0 89,854 -13.5 Honda too reported weaker sales (-3%, -4%, -12% MoM respectively).
Non-national 19,060 -3.3 -10.3 69,962 -9.5 Only Nissan (+2% MoM) showed a 3% rise in sales, spurred on by its
MPV Grand Livina model (+9%). YTD, TIV fell 12% YoY to 159,816
Marque units, accounting for 35% of our estimates of 438,000-465,000 units.
Proton 9,804 -3.9 -31.7 39,193 -19.9
Perodua 12,271 -14.2 -16.4 50,661 -7.8
We expect TIV to contract 15-20% for 2009, as the sector continues
Toyota 6,884 -3.4 -30.1 24,220 -28.8 to suffer from an absence of new model launches and a stricter
Honda 3,425 -12.3 36.8 14,063 43.7 financing environment. Reject rates for Proton’s applicants remain high
Nissan 2,501 2.3 -2.9 9,620 2.1 whilst the 85-100bps hike in Hire Purchase (HP) rates on non-national
cars will further dampen sales.
Mkt share Apr 09 ppt chg ppt chg YTD % chg
(%) MoM YoY (unit) YoY
A good NAP is needed to wake the sector up. The National
Automotive Policy (NAP), which will be revealed by 3Q09, needs to
Passenger 90.6 0.1 10.7 90.6 10.3
boldly address among others: (i) consolidation of national marques and
Commercial 9.4 -0.1 -10.7 9.4 -10.3
vendors, and (ii) issues on Approved Permits (APs). A pro-active
guideline will help shape the sluggish sector. Until then, we maintain
National 53.7 -1.7 -4.1 56.2 -1.1
our Underweight call, with Sell calls on Proton and Tan Chong.
Non-national 46.3 1.7 4.1 43.8 1.1
Marque
Proton 23.8 0.8 -4.7 24.5 -1.7
Perodua 29.8 -2.5 0.6 31.7 1.4
Toyota 16.7 0.6 -2.9 15.2 -3.6
Honda 8.3 -0.5 3.3 8.8 3.4
Nissan 6.1 0.5 1.0 6.0 0.8
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 Hold 2.14 2.40 31.9 48.1 6.7 4.4 6.1 6.5 0.5
Tan Chong Sell 1.60 1.05 17.8 17.9 9.0 8.9 3.1 3.1 0.7
UMW Hold 5.60 5.70 34.2 42.2 16.4 13.3 4.2 5.3 1.5
Proton* Sell 2.86 2.50 9.8 6.2 29.3 46.3 3.5 3.5 0.3
Source: Maybank-IB, * calendarised & includes R&D grants of RM120m (FY09) and RM100m (FY10)

2. Auto
Total Industry Volume
60,000
Passenger Cars Commercial Vehicles
50,000
40,000
30,000
20,000
Apr‐07 Aug‐07 Dec‐07 Apr‐08 Aug‐08 Dec‐08 Apr‐09
Source: MAA, Maybank-IB
USD-RM Movement
3.80 3.72
3.70
3.60 3.53
3.50 3.46 3.45 3.44 3.45
3.41
3.40
3.31
3.30 3.27
3.20
3.20
3.10
3.00
19-May
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
Source: MAA, Maybank-IB 1Q09
JPY-RM Movement
4.00
3.83
3.80 3.70 3.66
3.60
3.40 3.27
3.21
3.20 3.10
2.93 2.95 2.95
3.00
2.80
2.80
2.60
19-May
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
Source: MAA, Maybank-IB
20 May 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 271.9 267.8 307.1 314.9 260.9 - MBM Resources 110.8 119.9 147.6 140.7 124.9
- Tan Chong Motors 441.8 759.6 783.8 1002.5 650.0 - Tan Chong Motors 81.9 115.8 100.1 115.9 76.2
- UMW Holdings 2689.8 2985.1 3568.2 3326.2 2918.4 - UMW Holdings 1553.4 1347.2 1648.9 1573.4 1499.7
- Proton 1454.9 1724.6 1708.8 1838.5 1537.3 - Proton 985.0 1226.0 1386.4 1434.6 1172.8
EBIT (RM’m) Gross Debt (RM’m)
- MBM Resources 15.9 21.6 19.1 23.0 10.1 - MBM Resources 45.0 37.4 35.7 32.0 36.9
- Tan Chong Motors 37.1 70.1 86.3 117.7 43.02 - Tan Chong Motors 454.1 431.3 387.0 361.6 569.4
- UMW Holdings 268.2 237.8 306.8 295.4 224.7 - UMW Holdings 295.2 341.3 432.4 467.4 571.0
- Proton 9.0 189.2 57.6 52.7 -58.7 - Proton 485.9 244.5 242.0 255.6 295.5
Pretax profit (RM’m) Net Cash (RM’m)
- MBM Resources 30.1 51.5 36.7 42.6 19.5 - MBM Resources 65.8 82.5 111.9 108.7 88.0
- Tan Chong Motors 34.0 67.1 84.0 115.7 40.4 - Tan Chong Motors -372.2 -315.5 -287.0 -245.6 -493.2
- UMW Holdings 315.6 292.9 355.0 353.8 269.9 - UMW Holdings 1258.2 1005.9 1216.5 1105.9 928.7
- Proton 11.0 193.1 58.7 56.6 -60.9 - Proton 499.1 981.6 1144.4 1179.0 877.2
Net profit (RM’m) Shareholders fund (RM’m)
- MBM Resources 22.6 42.8 25.7 32.2 16.7 - MBM Resources 759.8 798.1 825.8 834.6 851.3
- Tan Chong Motors 31.9 54.1 68.1 95.4 28.2 - Tan Chong Motors 1232.6 1286.8 1330.1 1399.7 1421.5
- UMW Holdings 143.0 141.8 151.7 152.7 116.1 - UMW Holdings 3130.1 3279.7 3339.4 3410.2 3522.9
- Proton 10.3 236.4 52.0 43.8 -74.7 - Proton 5198.6 5443.0 5480.8 5520.2 5387.9
PROFIT RATIO
EBIT margins (%) NTA / Share (RM)
- MBM Resources 5.8 8.1 6.2 7.3 3.9 - MBM Resources 3.05 3.20 3.31 3.34 3.41
- Tan Chong Motors 8.4 9.2 11.0 11.7 6.6 - Tan Chong Motors 1.85 1.93 1.99 2.10 2.15
- UMW Holdings 10.0 8.0 8.6 8.9 7.7 - UMW Holdings 5.83 2.94 3.00 3.01 3.07
- Proton 0.6 11.0 3.4 2.9 -3.8 - Proton 9.01 9.36 9.36 9.39 9.10
Pretax margins (%) Inventories
- MBM Resources 11.1 19.2 12.0 13.5 7.5 - MBM Resources 101.2 117.2 108.8 98.8 146.8
- Tan Chong Motors 7.7 8.8 10.7 11.5 6.2 - Tan Chong Motors 583.3 579.2 603.1 627.4 854.4
- UMW Holdings 11.7 9.8 9.9 10.6 9.2 - UMW Holdings 1048.9 1317.6 1385.0 1358.0 1464.0
- Proton 0.8 11.2 3.4 3.1 -4.0 - Proton 1282.1 1090.3 1162.6 1215.5 1391.3
Net profit margins (%) Trade Receivables
- MBM Resources 8.3 16.0 8.4 10.2 6.4 - MBM Resources 114.1 104.3 104.5 98.9 91.2
- Tan Chong Motors 7.2 7.1 8.7 9.5 4.3 - Tan Chong Motors 307.7 310.9 310.4 111.2 280.2
- UMW Holdings 5.3 4.7 4.3 4.6 4.0 - UMW Holdings 657.8 782.7 734.1 753.0 802.7
- Proton 0.7 13.7 3.0 2.4 -4.9 - Proton 884.6 1022.2 835.4 739.1 776.2
CASH FLOW CASH FLOW
Operating (RM’m) Financing (RM’m)
- MBM Resources 4.2 3.4 18.5 29.7 -21.2 - MBM Resources -24.9 -15.3 -5.1 -28.4 -0.9
- Tan Chong Motors -33.0 89.1 65.5 67.6 -180.9 - Tan Chong Motors 64.5 -22.9 -68.9 -50.5 200.7
- UMW Holdings 264.0 -77.6 292.4 275.8 56.8 - UMW Holdings -146.1 -57.4 190.7 -71.9 10.2
- Proton 267.9 1028.8 -769.7 164.6 -158.4 - Proton 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
20 May 2009 Page 3 of 4

4. Auto
Definition of Ratings
Maybank Investment Bank Research uses the following rating system:
BUY Total return is expected to be above 10% in the next 12 months
HOLD Total return is expected to be between -5% to 10% in the next 12 months
SELL Total return is expected to be below -5% in the next 12 months
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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20 May 2009 Page 4 of 4