AmResearch maintains Buy on Berjaya Auto

KUALA LUMPUR: AmResearch has maintained its Buy call on Berjaya Auto with a fair value of RM4.50 a share.

In a note on Wednesday, the research house said 4QFY15 results are likely to be weak due to the industry-wide impact of the pre-GST freeze in purchases by dealers.

"Our FY15F earnings are trimmed 8% to reflect lower margins given the less favorable model mix, but FY16F-17F earnings remain intact," it said.

It added that  April sales recovered strongly to 1,300 units and this momentum sustained in May. More importantly, it was driven by a recovery in higher margin models while Mazda 2 sales sustained at 300-400/month.

"Our FY16F Mazda TIV is conservative at 14K for domestic and 4.4K for BAP, but as it is, we are already looking at a 30% EPS growth for FY16F, 13% higher than consensus and well outperforming sector growth of 13%," it said.