KUALA LUMPUR (Dec 13): Shares of Bermaz Auto Bhd (KL:BAUTO) slipped on Friday to their lowest in 15 months, after the automotive assembler reported a weaker-than-expected second financial quarter.
Bermaz Auto fell as much as seven sen or 3.4% to RM1.97, its lowest since September 2023. The stock was trading at RM1.98 at 9.05am, giving the company a market capitalisation of RM2.3 billion. Trading volume totalled nearly 1.2 million shares so far.
Core net profit for the first half ended Oct 31, 2024 (1HFY2025) reported on Thursday only accounted for about one-third of the consensus forecast for the financial year ending April 30, 2025 (FY2025). At least two analysts downgraded their ratings for the stock, and warned of a subdued outlook ahead.
BIMB Securities lowered for Bermaz Auto to ‘sell’ from a ‘buy’ recommendation, flagging weaker performance and increased market pressures, as sales of key Mazda and Kia branded vehicles fell amid competition from Chinese-made vehicles.
Shares of Bermaz Auto have fallen about 15% year-to-date, amid intensifying competition in the domestic market and concerns over the cost of living, as well as expectations of moderating sales following record profits.
Analysts are also increasingly cautious. Following the latest round of revisions, Bermaz Auto is now expected to make a net profit of RM269.7 million for FY2025, down from RM351.0 million for FY2024.
There are now eight ‘buy’ calls, six ‘hold’ and one ‘sell’ rating, with the consensus 12-month target price at RM2.33, according to Bloomberg.
For CIMB Securities, which cut Bermaz Auto to ‘hold’ from ‘buy’, Bermaz Auto is facing rising competition in the sport utility vehicle and electric vehicle segments, dragging on its earnings outlook.
Sales of Mazda vehicles could fall by 19%, while that of Kia could grow at a slower rate, according to the research house’s projections. Overall, Bermaz Auto’s core earnings in FY2025 could decline 37% to RM222.1 million, or 19.1 sen per share.