Berjaya Auto distributor of Mazda, Peugeot, and Kia is poised for upbeat sales in FY23, its current total booking backlog of 10k units is unchanged from three months ago – indicating that deliveries have been replenished with new bookings. Meanwhile, we expect BAUTO’s 2QFY23 net profit to come in at RM55m-RM65m, up 10% to 30% sequentially.
Kenanga is raising its FY23-24F net profit forecasts by 19- 14%, and lifting TP by 15% to RM2.65 (from RM2.30), and reiterating its OUTPERFORM call.
- The car distributor guided for upbeat sales in FY23 for Mazda at 13k units (+8% YoY), Peugeot at 2k units (+107% YoY), and Kia at 2k (+456% YoY), against our assumptions of 12.1k units (+1% YoY), 1k units (+4% YoY) and 1k units (+178% YoY), respectively. As such, Kenanga has raised assumptions to 13k units for Mazda (+7%), and 2k units for both Peugeot (+100% YoY) and Kia (+100% YoY). For FY24, assuming the sales momentum is sustained, the research house will raise assumptions to 13.7k units for Mazda (+5% YoY), and 2.1k units for both Peugeot (+5% YoY) and Kia (+5% YoY), from 13k units (+7% YoY), 1.5k units (+50% YoY) and 1.5k units (+50% YoY) previously.
- With the strong response to CKD models such as Kia Carnival, BAUTO plans to put onto the market a second Kia CKD model, i.e. Sorento, scheduled for an official launch in Jan 2023 or Feb 2023, and a third thereafter, either Sportage or Seltos. These will be earnings accretive for BAUTO as CKD models command higher margins than CBU models of up to 5ppts. Over the longer term, BAUTO targets its annual sales of Kia vehicles to hit 10k units within the next 3-4 years, a five-fold increase from its FY23F target of 2k units.
- Berjaya Auto said it is committed to a gradual transition toward electric vehicles. It is working hand in hand with other carmakers to gradually strengthen the ecosystem for hybrid and electric vehicles locally to make their prices more affordable. For a start, its bringing various CBU EV models to the local market including Mazda MX-30 EV, Peugeot e-2008 EV, Kia EV6, and Kia PBV1, and beefing up after-sales support in terms of maintenance services and spare parts support system.
- Meanwhile, Kenanga expects BAUTO’s 2QFY23 results due out by the later part of the week, to come in at RM55mRM65m at the core net profit level (up 10% to 30% sequentially), taking its cue from Mazda’s sales in 2QFY23 of 3,394 units (+16% QoQ) that brought 1HFY23 sales to 6,331 units (+49% YoY) as reported by Malaysian Automotive Association and assuming its net profit margin could sustain at between 7% to 8%.
- Kenanga said it believes a 50% sales & service tax rebate given to buyers of all Mazda models (out of BAUTO’s own pocket) between July 2022 and December 2022 will be cushioned by the above-average margins BAUTO earns from its recently launched new model.
