Quick take: BAuto shares up 2.7% on earnings beat

KUALA LUMPUR: Shares in Bermaz Auto Bhd (BAuto) climbed 2.7% in early trade on Monday after the company beat analysts expectations on its latest quarterly results.

The official distributor of Mazda cars rose 2.7%, or four sen to RM1.52 with 1.24 million shares done. BAuto-C18 added 3.5 sen to 8.5 sen and BAuto-19 rose two sen to 13.5 sen.

BAuto net profit for the fourth quarter ended April 30, 2021 surged to RM66.83mil from RM2.46mil a year ago.

Its revenue increased 114.2% to RM641.19mil as compared to RM299.36mil a year ago.

For the full financial year ended April 30, BAuto posted a net profit of RM133.9mil on revenue of RM2.28bil.

The board has approved and declared a fourth interim dividend of 1.50 sen single-tier dividend per share and a special dividend of 1.75 sen single-tier dividend per share in respect of FY21 to be payable on Aug 5, 2021.

AmInvestment Bank Research said BAuto’s FY21 core net profit of RM133.9mil came in above expectations, beating the house and consensus estimates by 50% and 40% respectively.

It has maintained its FY22–23F earnings estimates.

“We maintain a buy on BAuto with an unchanged fair value of RM1.80 per share based on an FY22F PE of 13x,” AmInvestment said.

“We continue to be positive on BAuto’s outlook as it is on track to be a prominent non-national automotive player in Malaysia with three leading brands under its belt.

“We are also excited about the third potential Mazda CKD programme (after the CX-5 and CX-8), which will come to light soon (from our ground checks). We expect the third Mazda CKD model to make its debut in 4QCY22,” it added.

Kenanga Research said BAuto’s FY21 PATAMI of RM133.9mil beat expectations, by 51% and 40% above the house and consensus full-year estimate respectively.

It said the variance from its result is due to higher-than-expected margin from

costs savings including reversal of over-accrued provision, the ending of aggressive promotion, and lower A&P costs with the extension of SST exemption.

“As such, we increase FY22E core net profit (CNP) by 19%, and introduce FY23E CNP of RM133.1mil (+12%), and hike our target price to RM1.45 (from RM1.30).

“The cost savings are varied in nature and may normalise in the upcoming quarters especially with the expected eventual ending of SST exemption. Maintain market perform,” Kenanga said.

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