KUALA LUMPUR: Bermaz Auto Bhd (BAuto) is expected to benefit from the Philippines market's post-pandemic recovery, according to Hong Leong Investment Bank Bhd (HLIB).
The firm noted that the newly-launched CX-60 and CX-90 premium models have been well received in that market.
Nevertheless, the firm expects BAuto's overall order backlogs to continue their downward trend, currently at 2,000 units compared to 2,200 to 2,500 units back in Jan 2024.
"We expect Malaysia's total industry volume (TIV) to slow down in 2024 following the record high base of 800,000 units achieved in 2023, alongside heightened competition with the entrance of new Chinese OEMs with aggressive pricing and marketing strategies.
"On a more positive note, BAuto has secured the exclusive distributorship for XPeng EV in Malaysia with starting model G6 to be launched in Aug 2024," it said in a note.
BAuto reported a fourth quarter ended April 30, 2024 (4QFY24) core profit after tax and minority interests of RM91 million, bringing FY24's sum to RM352 million.
The strong performance during the quarter was mainly driven by the new launch of CX-5 IPM6, return of Peugeot inventories to Stellantis with margins as well as lumpy export volume for Kia completely knocked downs (CKDs) to Thailand during the quarter.
HLIB said the results werevwithin its FY24 forecast at 104 per cent but slightly above consensus at 107 per cent.
The firm maintained its "Hold" recommendation on BAuto with an unchanged target price of RM2.46.
"Despite the downward normalisation of sales and earnings, BAuto still has a healthy balance sheet position with net cash of RM302.3 million as of end 4Q24," it noted.
