BAuto sales set to rebound upon sector resumption


PETALING JAYA: Bermaz Auto Bhd (BAuto) is expected to benefit from an anticipated vehicle sales rebound in the second half of 2021, backed by the government’s National Recovery Plan (NRP) and extended tax holiday.

Based on the NRP, UOB Kay Hian said the automotive sector will most likely be reopened by July or August.

This will be when the country’s projected daily Covid-19 cases drop to below 4,000 and an estimated 10% of the population has been vaccinated.

“Sales volume is expected to rebound swiftly once the sector’s supply chain resumes operation, to be driven by the sales tax waiver,” it said in a report.

Under the vehicle tax exemption, which has been extended until the end of the year, locally-assembled cars are exempted from sales tax while for imported cars, the sales tax has been reduced from 10% to 5%.

AmInvestment Bank, meanwhile, said it continues to be positive on BAuto’s outlook, as the car company 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 completely-knocked-down (CKD) programme (after the CX-5 and CX-8), which will come to light soon. We expect the third Mazda CKD model to make its debut in the fourth quarter of 2022.”

BAuto is involved in the distribution, assembling, retailing and the provision of after-sales service of Mazda vehicles in Malaysia. The group is also involved in the distribution of locally assembled Mazda vehicles in Malaysia and the Philippines.

PublicInvest Research said BAuto’s Philippine operations is expected to continue to be impacted by the Covid-19 pandemic.

“Nevertheless, we understand that this will be mitigated by its minimal operating overhead. Note that BAuto had recently acquired an additional 35% stake in Berjaya Auto Alliance from Berjaya Corp for a cash consideration of RM4.6mil, increasing its stake from 20% to 55%.

“Its contribution remains immaterial during the quarter,” said the research house.”

BAuto’s net profit for the financial year ended April 30, 2021 increased to RM133.94mil from RM100.84mil in the previous corresponding period.

Revenue rose to RM2.29bil from RM1.76bil a year ago, driven by higher sales volume from its domestic operations, though this was partly offset by the lower sales volume from its Philippine operations.

The company’s net profit for the fourth quarter of 2021 increased to RM66.83mil as compared to RM2.46mil in the fourth quarter of 2020, while revenue rose to RM641.2mil versus RM299.36mil in the same period last year.

MIDF Research said BAuto’s 2021 financial results “smashed” estimates.

“Overall, we project group-wide total industry volume (comprising its Mazda, Kia and Peugeot models) growth of 21% and 19% in 2022 and 2023, respectively, driven mainly by the newly acquired brands.”

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