CGSI Research expects earnings improvements, especially from FY26 onwards, underpinned by an expanded lineup.
PETALING JAYA: Bermaz Auto Bhd’s (BAuto) sales volume is expected to improve in the second half of the year, despite a challenging near-term environment in the Malaysian auto market.
CGS International (CGSI) Research attributed this to the launch of the new Xpeng G9 and the introduction of three electric vehicle (EV) models from Deepal, after BAuto secured the Deepal distributorship recently.
Mazda Malaysia will also launch its new CX60 in the second quarter of the year (2Q25) and the CX-80 in 3Q25.
The Xpeng G6, launched in Malaysia in 4Q24, is currently selling around 120 units per month.
Note that BAuto is also the distributor for Mazda vehicles in the country.
“We cut our financial year 2025 (FY25) to FY27 earnings forecast by 10% to 26% to factor in a lower market share for Mazda Malaysia given the intense competition, while we added Xpeng’s volume assumptions for FY25-FY27, and Deepal’s volumes for FY26 to FY27,” the research house said.
CGSI Research maintained its “add” call on BAuto, expecting earnings improvements, especially from FY26 onwards, underpinned by an expanded lineup.
It said the current valuations appear undemanding, further supported by strong dividend yields of about 10% in FY26 to FY27, based on a 60% dividend payout.
“Following an earnings revision and some housekeeping adjustments, we lower our target price to RM2.30 a share from RM3.10,” the research house added.
BAuto’s share price has fallen by 33% since its latest peak in early December 2024, which CGSI Research attributed to market concerns over the impact of heightened competition from Chinese carmakers and aggressive price discounts by new entrants in the Malaysian auto market.
While Malaysia’s total industry volume rose by 2% in 2024, Mazda’s sales volume fell by 24% over the same period, according to the Malaysia Automotive Association.
BAuto shares closed unchanged yesterday at RM1.30.