KUALA LUMPUR: Malaysian car distributor Bermaz Auto Bhd
fell to a record low after its first-quarter net income slumped 88%, weighed by strong competition from Chinese automakers.
The company’s shares dropped nearly 9% to 61.5 sen on Friday, according to data compiled by Bloomberg. The distributor of Mazda Motor Corp., Kia Corp. and Xpeng Inc. vehicles said net income for the first quarter ended July fell 88% to RM8.28mil from a year ago, on lower sales volumes in its domestic operations. Revenue slumped 42% in the quarter.
Bermaz Auto expects the challenging operating environment that has led to seven straight quarters of dwindling earnings to remain as Chinese automakers intensify their expansion in Malaysia.
"Vehicle sales in the country are impacted by the influx of Chinese-made vehicles, which are making inroad with their low pricing strategy,” the company said in its earnings statement on Thursday.
The steady drop in earnings has shaved 75% off the company’s market value since July last year.
The company said the overall Malaysian economy is also expected to be impacted by "inflationary pressures, ongoing uncertainties in geopolitical conflicts and weaker global growth.”
Bermaz expects sales of some models - such as the Mazda CX-60 and Mazda CX-80 - to offer some support in the coming quarters.
Apex Securities Bhd. downgraded its recommendation on Bermaz’s shares to sell from hold and lowered its price target to 50 sen from 93 sen following the first-quarter results. "Our earlier expectations for a recovery in Mazda sales have not materialised,” it said in a note on Friday.
It also trimmed its forecast for the company’s 2026 earnings by 58% to reflect heightened competitive pressures in the non-national segment and softer projected sales across key completely-knocked-down vehicle models. - Bloomberg
