CIMB IB Research trims target price for Bermaz to RM2.15

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KUALA LUMPUR (June 14): CIMB IB Research has maintained its “Add” rating on Bermaz Auto Bhd at RM2.02 with a lower target price of RM2.15 (from RM2.20) and said Bermaz’s FY4/17 core net profit was below expectation at 85%/89% of house/ consensus full-year forecasts due to lower-than-expected sales volume.

In a note today, CIMB Research said Bermaz declared final dividends of 3.2 sen in 4QFY4/17, bringing total dividend in FY17 to 11.7 sen, below house expectation of 14 sen.

The research house said Bermaz’s core net profit in FY17 fell 38% yoy due to lower sales volume across all markets and margin erosion from higher opex following the depreciation of ringgit against yen.

“Expect stronger earnings recovery in FY18F, driven by several new model launches.

“We cut FY18-19F EPS by 5-9%. Maintain Add with a lower target price of RM2.15,” it said.