By Ying Xian Wong
Shares of Bermaz Auto, a Malaysia-listed car retailer, saw a significant increase on Wednesday morning following the release of robust quarterly earnings. The company reported a nearly doubled net profit of MYR100.22 million ($21.4 million) for the fiscal first quarter, compared to MYR50.16 million in the previous year, driven by higher sales. This impressive performance led analysts to raise their ratings and target prices for Bermaz Auto.
The stock price of Bermaz Auto surged as much as 3.7%, and is currently 2.8% higher at 2.24 ringgit, resulting in a 12-month gain of 22%. The company’s quarterly revenue also climbed by 52% to MYR1.09 billion.
TA Securities analysts have upgraded their rating on Bermaz Auto from hold to buy, while raising the stock’s target price to MYR2.48 from MYR2.36. To reflect the better-than-expected first-quarter earnings and increased sales volume assumptions, they have also raised their earnings estimates for fiscal 2024 and 2025 by 15% and 0.6% respectively.
Analyst Angeline Chin believes Bermaz Auto has the potential to maintain its strong sales momentum in the coming quarter, citing the company’s order backlog of approximately 4,500 units. This positive outlook aligns with the overall Malaysian automotive industry, which is expected to experience an increase in output this year due to the easing of supply-chain bottlenecks and the resolution of the semiconductor shortage.
Another analyst from Hong Leong Investment Bank expects Bermaz Auto to sustain its momentum going forward and has raised earnings forecasts for fiscal 2024 and 2025 by 87% and 15% respectively. The strong backlog of orders, along with the continued economic recovery in Malaysia and the Philippines and a weakened Japanese yen, are expected to contribute to Bermaz Auto’s earnings growth.
Affin Hwang Investment Bank has also increased its earnings views for Bermaz Auto due to the company’s strong sales outlook and robust orderbook. Analysts from the bank upgraded the stock from sell to hold and raised the target price to MYR2.34 from MYR1.74. They have also adjusted their earnings per share forecasts for fiscal 2024-2026 by 57%, 23%, and 29% respectively.
The positive performance of Bermaz Auto, which distributes Mazda cars in Malaysia and the Philippines, highlights its resilience and potential in the automotive market.
