Quick take: Bermaz Auto up 9% on positive results, earnings prospects

KUALA LUMPUR: Shares of Bermaz Auto jumped 9% in early trade Thursday after some analysts upgraded their target price on the stocks, following the release of its third quarter results.

The counter rose 9.38%, or 21 sen to RM2.45, its highest since June 2018 with over two million shares traded.

BAUTO-C1 jumped 64.29%, or 4.5 sen to 11.5 sen, BAUTO-CY gained 33.33%, or four sen to 16 sen and BAUTO-CZ rose 36.11%, or 6.5 sen to 24.5 sen.

Bermaz Auto has registered a record high net profit of RM81.01mil for the third quarter ended Jan 31, 2019 (3QFY19) on the back of higher revenue from domestic operations and higher share of profit contribution from its associate company Mazda Malaysia Sdn Bhd (MMSB).

Its revenue rose 39.1% to a record RM778.13mil, from RM559.4mil a year ago.

It said the higher share of profit contribution from MMSB was mainly attributed to an increase in production volume for the new CX-5 model to cater for both the domestic and export markets.

Affin Hwang Capital Research has maintained its “buy” rating on Bermaz Auto a higher target price of RM3.05.

Bermaz Auto reported another strong set of results -9MFY19 core net profit more than doubled to RM206mil, driven by higher revenue(+37% yoy), improvement in EBITDA margin and higher contribution from its 30%-owned associate, Mazda Malaysia SB.

“Overall,the results were ahead of expectations–9MFY19 core net profit achieved 93% and 86% of market and our full year estimates.

“We are raising our FY19E EPS forecast by12% while maintaining FY20-21E estimates.

“Despite the expected dip in FY20E earnings, valuations still look appealing at 10x PER and 6% dividend yield for CY19E,” Affin said.

Source : TheStar