Affin Hwang Capital raises target price for Bermaz Auto to RM3.05

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KUALA LUMPUR (March 14): Affin Hwang Capital Research has maintained its “Buy” rating on Bermaz Auto Bhd (Bauto) at RM2.24 with a higher target price of RM3.05 (from RM2.85) and said Bauto reported another strong set of results - 9MFY19 core net profit more than doubled to RM206 million, driven by higher revenue (+37% y-o-y), improvement in EBITDA margin and higher contribution from its 30%-owned associate, Mazda Malaysia SB (MMSB).

In a note today, the research house said that overall, the results were ahead of expectations – 9MFY19 core net profit achieved 93% and 86% of market and house full year estimates.

“We are raising our FY19E EPS forecast by 12% while maintaining FY20-21E estimates.

“Despite the expected dip in FY20E earnings, valuations still look appealing at 10x PER and 6% dividend yield for CY19E.

“We reaffirm our Buy call and higher target price of RM3.05,” it said.