KUALA LUMPUR: RHB Research has lifted Bermaz Auto Bhd's (BAuto) earnings for financial years 2024 (FY24)-FY25 by 14-13 per cent as it raises sales volume assumptions.
RHB Research said Mazda's sales would be boosted by higher completely knocked down (CKD) contributions while Kia would be driven by its new models, especially the upcoming Sportage.
BAuto launched Kia Sorento and Peugeot Landtrek yesterday as part of continuing Kia and Peugeot's growth.
"We see the recent sell-down as an opportunity to accumulate, as we expect robust earnings growth even beyond the delivery of Sales and Service Tax exempt orders," said its analyst Jim Lim.
The Kia Sorento and Peugeot Landtrek add to BAuto's currently limited number of models for both marques.
It said the former would be CKD and cost an estimated RM220-RM255,000.
The latter will be completely built units (CBU) and cost RM123,000.
"The addition of these two variants are part of BAuto's wider strategy to continue growing both brands in Malaysia with more models on the way," it said.
As for Mazda, it noted sales of the first units of the CKD CX-30 could be recognised in February or March, with preparation for local assembly of the Mazda CX-30 already underway.
"With prices estimated at RM10,000 lower for the CKD CX-30 versus the CBU variant and greater certainty in production volumes, this local assembly should help drive volume growth," said RHB Research.
In the first quarter of 2023, BAuto will add the Peugeot e-2008 into its existing electronic vehicle (EV) line-up, which currently comprises Mazda and Kia's MX-30 and EV6.
"While we think the brands' EV offerings exemplify their electrification ambitions, consumers here are still only slowly warming up to EVs.
"There is no waiting time for the MX-30 currently and a short waiting period for certain colours of the EV6," it said.
It noted that the lukewarm response on the EV was likely due to the vehicle's high prices, lack of charging infrastructure and long charging times.
BAuto's EV sales contributions are likely to remain below five per cent.
RHB Research said the yen's recent rise against the ringgit had prompted some concerns, as BAuto had gains or losses from a weakening or strengthening of the yen via 30 per cent associate Mazda Malaysia, which incurred some costs in yen.
BAuto also incurred yen costs from importing Mazda CBUs - 18 per cent in the first half of FY23.
"We believe this is set to decline with growing CKD contributions. We estimate that a five per cent strengthening of the yen/ringgit will cut earnings by RM0.8 million,"
The firm maintained its "Buy" call on the stock with a higher target price of RM2.90.