HOLD (Downgraded)
Current price:
Target price:
Upside:
Previous TP :
RM2.51
RM2.67
+6.4%
RM2.55
Analyst
Highlights
Sime’s FY26 core net profit rose 33% yoy to RM1,547m, beating our expectations, driven by BMW’s dividend and stronger Malaysia Industrial earnings.
Management expects a gradual recovery in mining-related maintenance activities to drive FY27 Industrial earnings. However, we await clearer signs of a sustained recovery.
Downgrade to HOLD but raise our SOTP-based target price to RM2.67 (from RM2.55) on higher earnings forecasts, with limited upside following the recent share price appreciation.
Analysis
Above expectations. Sime Darby’s (Sime) FY26 core net profit of RM1,547m (+33% yoy) excluding impairments of RM194m for its China motor segment’s operations and RM66m for the industrial division, came in above our expectation, accounting for 111%/118% of our and consensus forecasts respectively. The positive deviation was mainly attributable to: a) stronger earnings from the motors division underpinned by a RM116m dividend from BMW Malaysia; and b) improved performance of the industrial division, supported by higher deliveries of power systems for DC projects in Malaysia.
Highlights
Sime’s FY26 core net profit rose 33% yoy to RM1,547m, beating our expectations, driven by BMW’s dividend and stronger Malaysia Industrial earnings.
Management expects a gradual recovery in mining-related maintenance activities to drive FY27 Industrial earnings. However, we await clearer signs of a sustained recovery.
Downgrade to HOLD but raise our SOTP-based target price to RM2.67 (from RM2.55) on higher earnings forecasts, with limited upside following the recent share price appreciation.
Analysis
Above expectations. Sime Darby’s (Sime) FY26 core net profit of RM1,547m (+33% yoy) excluding impairments of RM194m for its China motor segment’s operations and RM66m for the industrial division, came in above our expectation, accounting for 111%/118% of our and consensus forecasts respectively. The positive deviation was mainly attributable to: a) stronger earnings from the motors division underpinned by a RM116m dividend from BMW Malaysia; and b) improved performance of the industrial division, supported by higher deliveries of power systems for DC projects in Malaysia.
HOLD (Downgraded)
Current price:
Target price:
Upside:
Previous TP :
RM2.51
RM2.67
+6.4%
RM2.55
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
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