• Maintain BUY (TP: RM2.80). BAuto’s FY24 net profit of RM351mn (15.5% YoY) is in line with our expectations and consensus full year expectations, at 103% and 105% respectively. In 4QFY24, BAuto’s revenue and net profit decreased to RM938mn (-12.6% YoY) and RM90mn (-10.3% YoY) respectively. The decline was mainly due to lower sales volume from its Mazda and Kia domestic operations compared to the previous year, which saw higher sales due to the final rush by consumers to register their vehicles by 31 March 2023 to be eligible for the sales tax exemption incentives. The group declared a fourth interim and special dividend of 4.75 sen and 7.0 sen per ordinary share, bringing the cumulative FY24 DPS to 26.0 sen (vs 22.0 sen in FY23), translating into a DY of 10.2%. We maintain a BUY call for BAuto with a TP of RM2.80, pegged at a lower PER of 10.5x (BAuto’s -0.5 SD average 5-year PER) to FY25f EPS of 27.0 sen.

• Key Highlight. In FY24, revenue and net profit increased to RM3.9bn (+10.8% YoY) and RM351mn (+15.5% YoY), respectively. The growth can be attributed to the increased sales volume, particularly from the Mazda CX-5 CKD (6,789 units) and Mazda CX-30 CKD models (5,833 units), as well as higher contributions from the associated company Kia Malaysia, which recorded higher export sales volume. On a QoQ basis, both revenue and net profit increased by 4.6% and 21.8%, respectively, mainly due to the increase in sales volume from Mazda Philippines (3QFY24: 606 units, 4QFY24: 637 units).

• Earnings revision. No change to our earnings forecast.

• Outlook. We anticipate BAuto to sustain its positive earnings trajectory, supported by several key factors: i) robust demand with a substantial backlog order (1,500 units for Mazda, 150 units for Kia, and 350 units for Mazda Philippines); ii) the launch of new and appealing models (Mazda CX-60, MX-30EV, Kia Sportage CBU, Kia EV9 EV, XPENG G6); and iii) strong operational performance in the Philippines, with a 54% increase in unit sales to 2,588 from 1,682 in 2023. Additionally, the company’s guidance for FY2025 projects total sales of 26,000 units, including contributions from Mazda Philippines and new XPENG models.

Source: BIMB Securities Research - 12 Jun 2024