Bermaz Auto Berhad - Fell short of expectations
Fri, 13-Jun-2025 07:44 am
by Amir Hamdan • Apex Research

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BAUTO (5248)

Target Price (RM)

0.93

Recommendation

Hold

Results below expectations. 4QFY25 core net profit (CNP) stood at RM21.2m, bringing the 12MFY25 CNP to RM155.9m. The result fell short of expectations, accounting for 60.5% of our full-year forecasts and 93.1% of consensus estimates. The earnings miss was driven by weaker-than-anticipated sales across key CKD models.

 

Lower Dividend Declared. The Group declared a fourth interim dividend of 1.5sen (4QFY24: 11.75sen), bringing FY25 DPS to 16.75sen (FY24: 26.0sen).

 

YoY. 4QFY25 CNP plunged 76.5% yoy on the back of a 43.6% decline in revenue and the absence of one-off gains from the closure of the PEUGEOT operation in March 2024. The revenue contraction was mainly due to lower sales volume of Mazda and Kia in the domestic market, as the segment continued to face pressure from an influx of competitively priced Chinese-made vehicles.

 

YTD. FY25 CNP declined 55.6% yoy, largely due to lower sales volume of Mazda and Kia in the domestic market, as mentioned above, and higher expenses related to Employees’ Share Scheme (FY25: RM6.6m vs FY24: RM1.6m).

 

QoQ. CNP fell 12.2% qoq, aligning with a 13.0% decline in revenue. This was primarily driven by softer sales volume of Mazda and Kia in the domestic market, despite higher revenue from sales of XPeng.

 

Outlook. Looking ahead to FY26, BAUTO’s continues to face a challenging market outlook due to influx of competitively priced Chinese-made vehicles. XPeng’s sales, despite promising, are yet to contribute significantly to offset the slide in sales of Mazda and Kia in Malaysia.

 

Earnings Revision. We have trimmed our FY26F and FY27F earnings by 47% and 45% respectively to account for the stiffer competition in the non-national segment and weaker forecasted sales across key CKD models. We also introduce FY28F earnings forecast of RM190.9m.

 

Valuation. We downgrade Bauto to HOLD (from BUY) with a lower TP of RM0.93 (from RM1.40) pegged to 7.3x PE multiple on FY27F EPS of 12.78 sen, and ascribed with three-star ESG rating.  

 

Risk. Global trade and economic uncertainties, adverse FX movements, and a moderation in domestic demand amid a softer GDP and TIV outlook.

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