Bermaz up as much as 5% on strong 4Q earnings, dividend

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KUALA LUMPUR (June 13): Bermaz Auto Bhd (BAuto) shares rose as much as 5% in early trade this morning after its 4QFY19 net profit rose to RM60.06 million from RM57.19 million last year on the back of lower operating overheads.

At 9.05am, BAuto was up 3.75% or 9 sen to RM2.49 with 518,600 shares traded. The stock had earlier risen to a high of RM2.53.

Quarterly revenue dipped 5.66% to RM538.28 million from RM570.59 million following lower vehicle sale volume in Malaysia and the Philippines. The group's full-year net profit jumped 89.51% to RM265.27 million from RM139.98 million in FY18, while revenue rose 25.05% to RM2.49 billion from RM1.99 billion.

Meanwhile, CIMB IB Research has maintained its “Add” rating on BAuto at RM2.40 with a higher target price of RM3.30 (from RM2.85) and said BAuto’s FY4/19 results beat house expectations by 11% and consensus by 7% due to better-than-expected margin in 4QFY19, driven by lower operating expense.

In a note June 12, the research house said BAuto also declared a higher 10.5 sen interim and final DPS in the quarter, raising the total FY19 dividend to 21.25 sen, ahead of our expectation.

CIMB Research expects BAuto to deliver 5% volume growth in FY20F, driven by new model launches such as Mazda 3, CX-8, CX-30 and new facelift model for CX-5 that will include a Turbo variant in Malaysia in 2HCY19.

Moreover, it said the group is cautiously optimistic for higher sales delivery in the Philippines, driven by new models.

“We raise FY20-21F EPS by 15-17%. Maintain Add with a higher RM3.30 target price,” it said.