Bermaz Auto has strongly outperformed expectations in 9MFY23, the group reported a record-breaking 3QFY23 core net profit of RM88m, which brought 9MFY23 core earnings to RM204m. This accounted for 99%/96% of MIDF’s consensus full-year estimates the house reported.
In line with the strong earnings, a higher 3rd interim dividend of 4.5sen was declared, bringing 9MFY23 dividends to 11sen, representing a 63% payout. This is still slightly short of the 70% payout target, but MIDF says it expects a much higher payout in the final quarter, in-line with the past 2-year trend.
3QFY23 core earnings were up +113%yoy on the back of stronger revenue and margins. Groupwide sales volume rose +47%yoy to 5,796 units driven by growth at Mazda/Peugeot/Kia/Mazda (PH). Associate earnings more than doubled to RM15m driven mainly by a +71%yoy volume increase at 30%- owned MMSB – the production growth is in-line with strong end-demand for Mazda CKD models (CX5, CX8).
Outstanding bookings now stand at 6.8K/400/250 units for Mazda/Kia/Peugeot. The outstanding Mazda bookings make up almost half of the revised FY24F Mazda TIV of 15.7K. Of the 6.8K, 21% comprise of Penjana tax-holiday bookings, 37% are on BAuto’s 50% SST rebate campaign, and the remaining 43% are on normal pricing. FY24F Mazda sales will be further supported by the launch of the CKD CX30 this month – some 1.6K bookings have been collected, which is already 27% of BAuto’s aggressive 6K/annum sales target for the model (FY21 CBU CX30 sales: 1924 units). In addition, 80% of existing CBU CX30 bookings have been converted to the CKD variant, which is at the normal catalogue price without SST subsidy or Penjana tax holiday. The CKD CX30 is expected to leapfrog to become Mazda’s 2nd largest volume driver after the CX5, which generates 7K-8K/annum sales volume. The house gathers that BAuto is negotiating for a 4th Mazda CKD model, which could catalyse volume growth further out. Meantime, the next CKD will be the Kia Sportage (Csegment SUV), expected to be rolled out 2Q-4QCY23.
MIDF raises its FY23F/24F net profit by +27%/+22% to reflect higher groupwide TIV of 19.5K/20.9K, stronger margins given lower A&P expenses offsetting the group’s 50% SST rebate campaign (which ran from Jul22’-Dec22’), and higher associate earnings which is in-line with the higher groupwide TIV expectation. It now expects FY23F earnings growth of +67%yoy driven by the Penjana tax holiday, while FY24F is expected to see a further +10%yoy growth on full-year contribution of the CKD CX30, though we are cognizant of potential cannibalization of CX5 sales given some overlap in price points.
