BJAUTO (5248) - Berjaya Auto - Explosive acceleration sustained
Target RM4.44 (Stock Rating: ADD)
At 75% of our full-year forecast and 72% of consensus, Berjaya Auto’s 3QFY4/15 core net earnings were in line with our expectation but slightly below consensus. A third interim dividend of 3.35 sen per share was declared, as expected. We make no changes to our EPS forecasts and our target price, still valuing the company at 14.0x CY16 P/E, a 10% premium over its peers’ average P/E in view of its higher growth trajectory. We reiterate our Add call on the stock, which remains as our top pick for the sector. Successful launch of its upcoming new models and continuous growth in its sales volume are potential re-rating catalysts.
Net earnings surged 90.1% yoy
Berjaya Auto’s (BAuto) 9MFY4/15 core net profit surged 90.1% yoy to RM160.1m, driven by a 33.4% yoy jump in revenue to RM1.4bn. The highly impressive performance was mainly due to higher sales volumes of Mazda vehicles. In Malaysia, the volume growth mainly came from the new Mazda2 model (launched on 22 Jan 2015), Mazda CX-5 completely knocked-down (CKD) model, and the three new completely built-up (CBU) models that were launched in 3QFY4/14, namely Mazda Biante, Mazda3 and Mazda CX-5 (2.5L). As for the Philippines, sales volume growth continued to be driven by Mazda2 and Mazda3 models.
Strong cashflow sustained
BAuto continues to reward its shareholders with consistent dividends. Its 3.35sen dividend per share brought its total declared dividends for FY15 to 8.60sen per share, translating into a 43.4% payout ratio, and consistent with its 40% dividend policy. And even with the consistent dividends and after its 20%-stake acquisition in Inokom for RM30m, BAuto still managed to increase its cash position to RM319m from RM313m as at end-1HFY15. This strong cashflow is achievable due to the group’s asset-light policy and zero gearing.
Bright prospect ahead
We expect BAuto to continue to outperform its peers in the challenging domestic auto segment, with new models boosting growth. Its recently-launched Mazda2 has been a success, and it is on track to launch more new models this year, namely Mazda CX-3 (July 2015), Mazda3 CKD (1Q15), Mazda CX-5 facelift (Apr 2015), and Mazda6 CKD (3Q15).
Source: CIMB Daybreak - 10 March 2015
Target RM4.44 (Stock Rating: ADD)
At 75% of our full-year forecast and 72% of consensus, Berjaya Auto’s 3QFY4/15 core net earnings were in line with our expectation but slightly below consensus. A third interim dividend of 3.35 sen per share was declared, as expected. We make no changes to our EPS forecasts and our target price, still valuing the company at 14.0x CY16 P/E, a 10% premium over its peers’ average P/E in view of its higher growth trajectory. We reiterate our Add call on the stock, which remains as our top pick for the sector. Successful launch of its upcoming new models and continuous growth in its sales volume are potential re-rating catalysts.
Net earnings surged 90.1% yoy
Berjaya Auto’s (BAuto) 9MFY4/15 core net profit surged 90.1% yoy to RM160.1m, driven by a 33.4% yoy jump in revenue to RM1.4bn. The highly impressive performance was mainly due to higher sales volumes of Mazda vehicles. In Malaysia, the volume growth mainly came from the new Mazda2 model (launched on 22 Jan 2015), Mazda CX-5 completely knocked-down (CKD) model, and the three new completely built-up (CBU) models that were launched in 3QFY4/14, namely Mazda Biante, Mazda3 and Mazda CX-5 (2.5L). As for the Philippines, sales volume growth continued to be driven by Mazda2 and Mazda3 models.
Strong cashflow sustained
BAuto continues to reward its shareholders with consistent dividends. Its 3.35sen dividend per share brought its total declared dividends for FY15 to 8.60sen per share, translating into a 43.4% payout ratio, and consistent with its 40% dividend policy. And even with the consistent dividends and after its 20%-stake acquisition in Inokom for RM30m, BAuto still managed to increase its cash position to RM319m from RM313m as at end-1HFY15. This strong cashflow is achievable due to the group’s asset-light policy and zero gearing.
Bright prospect ahead
We expect BAuto to continue to outperform its peers in the challenging domestic auto segment, with new models boosting growth. Its recently-launched Mazda2 has been a success, and it is on track to launch more new models this year, namely Mazda CX-3 (July 2015), Mazda3 CKD (1Q15), Mazda CX-5 facelift (Apr 2015), and Mazda6 CKD (3Q15).
Source: CIMB Daybreak - 10 March 2015
