AmInvest Research Reports

Bermaz Auto - 1QFY25 below expectations, ASP is sticky

AmInvest
Publish date: Thu, 12 Sep 2024, 09:52 AM
AmInvest
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Investment Highlights

  • Maintain BUY on Bermaz Auto (BAUTO) with a lower fair value of RM3.10/share (from RM3.42/share) as we cut our FY25F forecast by 8% and peg it to an unchanged 12x FY25 P/E (its historical 5-year average).
  • BAUTO delivered a 1QFY25 PATAMI of RM70.2mil (-30% YoY, -22% QoQ). The result was below our expectations, making up only 21% of our FY25 forecast.
  • We cut our FY25 earnings forecast by 8% as we lower our ASP growth assumption to +1% YoY from our earlier +5% YoY.
  • The group announced an interim DPS of 3.5sen (-30% YoY), which represents a payout ratio of 59% (+0.3 pts YoY).
  • The number of car units sold was 23% and 3% lower YoY and QoQ.
  • The Philippines operations continued to deliver a strong performance with a strong customer take-up.
  • BAUTO is planning to buy 15% of EP Manufacturing (EPMB MK, Not Rated) for a total cash consideration of RM19.8m pending approval from Bursa Malaysia.
  • The inventory turnover was at 5.9x in FY24, lower than its historical average of 7x.
  • The balance sheet remains solid with a net cash of RM245mil.
  • We remain optimistic on BAUTO, the new model pipeline is promising and should sell well.
  • The stock currently trades at 9.2x FY25 P/E, which is at a 23% discount to its 5-year historical average.

Source: AmInvest Research - 12 Sep 2024

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