Friday 29 Mar 2024
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KUALA LUMPUR (Mar 13): CIMB IB Research has maintained its “Hold” rating on Bermaz Auto Bhd at RM2.02 with a higher target price of RM2.14 (from RM2.06) and said Bermaz’s 9MFY4/18 results beat house expectation at 67% of house full-year forecast due to better-than-expected associates’ profits, but broadly in line at 60% of Bloomberg consensus.

In a note March 12, the research house said it expects stronger earnings recovery to continue in 4QFY18 driven by the new CX-5.

It said net profit in 9MFY4/18 fell 14.4% year-on-year due to margin compression from changes in the sales mix and higher sales incentives given for the CX-5 run-out model.

“We raise our FY18-20F forecasts by 3-6% to reflect favourable forex movements and higher associates profit contribution.

“Maintain Hold with a higher RM2.14 target price, based on 13x CY19 P/E, in line with historical mean. The stock offers a decent CY18F yield of 5.3%,” it said.

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