PETALING JAYA: Bermaz Auto Bhd
(BAuto) is poised for a stronger earnings trajectory over the next two financial years, underpinned by robust demand, new model rollouts and a turnaround in previously loss-making operations.
The group’s recovery drive is expected to gain traction, with net profit for the financial year ending April 30, 2026 (FY26) projected to exceed RM80mil and momentum carrying into FY27 as structural improvements take hold.
Growth will be supported by both internal initiatives and favourable external factors, including currency movements and evolving consumer preferences.
Kenanga Research said it remains optimistic on BAuto’s prospects following its recent engagement with the company.
The research house has raised its FY26 and FY27 net profit forecasts for BAuto by 10% and 4% respectively, citing stronger vehicle demand and margin expansion as the ringgit strengthens against the yen. For the fourth quarter of FY26, earnings are expected to moderate sequentially to between RM25mil to RM30mil.
This reflects shorter delivery periods in February, although volumes are anticipated to rebound in March and April.
Kenanga Research said demand remains anchored by the Mazda 3 1.5L, alongside improved deliveries of the CX-30 and facelifted CX-5, while electric vehicle (EV) bookings for Xpeng models have risen notably.
Overall, this points to FY26 net profit reaching between RM83.1mil and RM88.1mil, exceeding the research house’s earlier expectations.
“Dividend prospects have also improved, with a projected full-year payout of 6.25 sen, implying a yield of about 7%,” it noted.
Looking ahead, the cessation of losses from Kia Malaysia Sdn Bhd and a pipeline of new models are set to lift FY27 earnings beyond RM100mil.
Upcoming launches include the all-new CX-5, a new subcompact sport utility vehicle and potential introduction of the Mazda 6e EV.
In parallel, Xpeng’s localisation efforts are expected to accelerate, with completely knocked-down production targeted by mid-2026 and additional models planned by end-2027.
Kenanga Research maintained its “outperform” call on BAuto and raised its target price to RM1.15 from RM1.10.
The target price is based on an unchanged 2027 price-to-earnings ratio (PER) of nine times, representing a discount to sector averages of 11 times PER.
