KUALA LUMPUR: Affin Hwang Capital research expects Bermaz Auto Bhd
's sales volume to moderate in FY20 due to competition for the Mazda CX-5 from the all-new Proton X70.
"We cut our FY21-22E EPS by 10-13% after lowering our sales forecasts and EBITDA margin assumptions to 12% (previously 12-14%).
"In tandem, we downgrade Bauto to HOLD (from Buy) with a lower 12-month TP of RM2.60 (from RM3.20) based on a 12x CY20E PER (3-year mean fwd. PER; from 14x) as we have turned cautious on Mazda’s near-term sales volume," it said in a note.
The research house expects the automaker's sales volume to dip 11% year-on-year (y-o-y) from its high of 19,000 units in FY19 due to lower take-up for the Mazda CX-5.
It added that Bermaz's new model launches over the medium, which include the Mazda 3, all-new Mazda CX-8, refreshed CX-5 2.5L turbro and all-new CX-30 are unlikely to outperform that of the CX-5 due to higher price points against their peers.
On a positive note, the research house said a mild recovery for its 60.4%-owned Bermaz Auto Philippines is expected to cusion the negative impact.
For 6M19, the Philippines unit's industry sales ended 1.5% higher y-o-y at 174,000 units.
Moving forward, Bermaz is targeting a third SUV localisation programme after the CX-5 and CX-8, which will require the automaker and its partners to invest about RM200mil to upgrade the Inokom production facility, increasing its capacity to 50,000 units per annum from 30,000 units currently.
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