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OSK maintains 'neutral' call on auto sector
by hlk Wed 22 Jun 2011, 17:42
OSK Research has maintained its "neutral" call on the automotive sector.
In a note today, OSK said its forecast of total industry volume (TIV) stood at 597,456, which implied a year-on-year contraction of 1.3 per cent for this year.
"While we expect TIV to have bottomed in May or by June at the latest, it is still early to turn bullish on the sector as the margins could undermine earnings in the second half on low plant utilisation which would lead to further earnings downgrade," it said.
OSK said while production may catch up speed in the second half, there may be earnings disappointments, notably among carmakers, as margins could be squeezed in the second quarter. -- BERNAMA
In a note today, OSK said its forecast of total industry volume (TIV) stood at 597,456, which implied a year-on-year contraction of 1.3 per cent for this year.
"While we expect TIV to have bottomed in May or by June at the latest, it is still early to turn bullish on the sector as the margins could undermine earnings in the second half on low plant utilisation which would lead to further earnings downgrade," it said.
OSK said while production may catch up speed in the second half, there may be earnings disappointments, notably among carmakers, as margins could be squeezed in the second quarter. -- BERNAMA
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