RHB Research has upgraded Bermaz Auto Bhd from a Neutral recommendation to a Buy recommendation with a TP of RM1.71.
It said that it expects a robust 2HFY22 (Apr) PATAMI driven by the Sales & Service Tax (SST) extension to Jun 2022 but lower FY23F sales volume assumptions to factor in the delayed soft demand period post-SST resumption.
It says that it would continue to like Bermaz Auto – its niche asset-light business model and non-volume products should steer the company comparatively better in a challenging CY22 outlook. BAUTO is our sector’s Top Pick.
RHB said that its channel check suggests that the waiting list for Mazda vehicles is c.1.5 months, with inventory level low at c.600 units. “Positively, the chip shortages issue remains limited to certain CBU models – there are sufficient chips on hand to continue CKD production up to Jun 2022. Additionally, Mazda Malaysia is looking to launch five facelifted models and one electric vehicle in CY22,” it said.