[RAM] RAM Ratings affirms APM's AA2/Stable sukuk ratings

RAM Ratings has affirmed the AA₂/Stable rating on APM Automotive Holdings Berhad’s (APM or the Group) RM1.5 bil Islamic Medium-Term Notes Programme (2016/2036).

The affirmation is based on our expectation that the Group will maintain its strong market position in the local automotive parts industry, underpinned by its conservative financial profile. While total industry volume (TIV) is expected to taper from the recent highs observed, new Proton and Perodua model launches at the end of 2025 and early 2026, and increased localisation of Chinese original equipment manufacturers (OEM) and domestic electricity (EV) assembly, following the expiration of tax exemptions on imported completely built-up units activities should keep business activity pipeline strong for local auto part manufacturers. APM, as one of the market leaders, is expected to benefit from this.

APM’s revenue expanded 7.93% y-o-y to reach RM 2.08 bil in FY Dec 2024 (FY 2023: RM 1.92 bil). This steady trajectory continued into the 9M FY Dec 2025, with the commencement of supply for certain new models launched in Malaysia supporting the increase in APM’s turnover to RM1.54 bil (9M 2024: RM1.49 bil). As at end-September 2025, APM remains in a net cash position, with cash and short-term funds totaling RM670.7 mil, comfortably covering its RM 288.6 mil in borrowings. Leverage was also conservative at 0.19 times as of the same date. Projected capex and investments required over the medium-term ranging between RM80 mil and RM120mil annually are expected to be met by its resilient and strong annual operating cash flows.

Government measures to keep petrol prices affordable as well as policy initiatives to increase localization of parts in the domestic auto-sector should support continued strong automotive sales. APM’s solid balance sheet, strong operating cash flow and dominant position among automotive manufacturers are anticipated to support the Group’s resilience amid the evolving Malaysian automotive market.

Nonetheless, APM remains susceptible to input prices and foreign exchange fluctuations, though these risks are partially mitigated by its ability to pass on costs to OEM customers. The Group faces concentration risk despite business diversification initiatives into other markets –a key rating constraint – with sales within Malaysia and to Perusahaan Otomobil Kedua Sdn Bhd specifically, the latter typically accounting for 30%-40% of revenue. Additionally, the Group’s heavy reliance on the interior and plastics division, as well as its sensitivity to economic cycles impacting automotive demand, are further rating moderators.


Analytical contacts
Kee Hwai Zher
(603) 2708 8259
hwaizher.kee@ram.com.my

Thong Mun Wai
(603) 2708 8255
munwai@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my