Mazda’s recovery is gaining traction, with c.3,000 outstanding bookings (c.32% of prior FY26 unit assumptions) led by the CX-60 and Mazda3.
XPeng provides visible, inventory-backed volumes with the G6 model refresh and pipeline mitigating post-CBU volatility.
We raised our earnings forecasts by 41%/48%/46%, following upward volume revisions, supported by Mazda order backlogs covering c.23% of FY26 sales assumptions and XPeng’s inventory-backed delivery visibility.
We upgrade to HOLD (from SELL) with a higher TP of RM0.80 (from RM0.50), based on its forward PE mean of 10.0x on revised FY27F EPS of 8.03 sen.
Mazda’s comeback takes shape. BAuto has set a constructive tone heading into 2026, underpinned by an expanded and refreshed product pipeline that we believe could reshape its sales trajectory. In Oct 2025, BAuto launched the Mazda CX‑60 and the new Mazda3 (1.5L full-spec), both of which have been well received. Initial bookings stand at c.300 units for the CX-60 and c.2,500 units for the Mazda3, lifting total outstanding bookings for Mazda Malaysia to c.3,000 units which already account for c.32% of our FY26 assumption. This provides early volume visibility following a previously subdued product cycle. Looking ahead, BAuto’s pipeline includes higher-priced Mazda CX-5 (2.5L) and CX-80 PHEV models, alongside a CKD B-segment SUV offering a lower entry price point. While new model launches are common across OEMs, Mazda’s upcoming lineup represents a clear price-segment repositioning, enabling the brand to address both premium replacement demand and incremental mass-market volumes. This broader coverage closes prior portfolio gaps and underpins the volume recovery assumptions embedded in our forecasts.
Powering the next leg. XPeng recorded a new monthly high of 202 units in Dec 2025 (vs 193 units in Nov), driven by front-loaded demand ahead of the expiry of CBU EV tax incentives. To mitigate the post-CBU impact, the group proactively imported c.700 units of inventory, equivalent to c.3–4 months of run-rate sales, providing near-term delivery visibility and reducing earnings volatility into 1H26. More recently, the facelifted G6 has been well received, reflecting pent-up demand from customers awaiting the refreshed variant. The XPeng G6 stands out on fast-charging capability, competitive range and performance, coupled with diversified variants at accessible price points, allowing it to appeal to a broader buyer base versus single-model EV offerings. Together with the planned rollout of additional models in 2026, this reduces model concentration risk and supports a more consistent sale.
Kia exit removes earnings drag. Kia Malaysia reported a loss of RM3.2m in 1QFY26 (vs RM1.5m profit in 1QFY25), with sales plunging to 104 units (vs 1,136 units), reflecting intense competition in the mid-market and luxury segments. Against this backdrop, following the cessation of the Kia distributorship in Nov 2025, Dinamikjaya Motors (DJM) 65%-owned subsidiary of Bermaz Auto (BAuto) will dispose of all remaining Kia spare parts and vehicle inventory to Kia Malaysia at cost. We estimate this decision avoids potential losses of c.RM16m, effectively containing downside risk and allowing management to reallocate capital and focus toward higher-return brands within BAuto’s portfolio.
Earning Revision. We raise our sales assumptions from 9,280/9,320/9,501 units to 13,080/13,760/13,850 units for FY26/27/28F, lifting CNP by 41%/48%/46%, reflecting upward revisions to volume assumptions. The revision is underpinned by visible order backlogs c.23% of our revised FY26 sales assumptions, alongside a broadened Mazda product mix and strong sales traction from XPeng, underpinned by c.700 units of available inventory.
Valuation. We upgrade to HOLD (from SELL) with a higher TP of RM0.80 (from RM0.50), based on its forward PE mean of 10.0x on revised FY27F EPS of 8.03 sen. We believe the higher ascribed PE valuation is warranted by (i) improved earnings visibility following a product-led volume recovery, (ii) stronger booking visibility from new Mazda launches, and (iii) reduced downside risk post-Kia exit.
Risk. Global trade uncertainty, softer GDP and TIV trends, and intensifying competition from Chinese OEMs.
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 3.919293 | 3.946936 |
| EUR | 4.633085 | 4.642854 |
| CNY | 0.566482 | 0.567657 |
| HKD | 0.501330 | 0.505404 |
| SGD | 3.081887 | 3.107305 |