BJAUTO (5248) : Berjaya Auto target raised at RHB Research
KUALA LUMPUR: RHB Research is maintaining its Buy call on Berjaya Auto (BAuto) with a revised target price of RM4.50 from the earlier RM3.60.
It said on Tuesday BAuto is attractive for its undemanding valuations of just 9.2 times FY16 coupled with a three-year FY14-17 earnings per share (EPS) CAGR of 34.2%.
“Applying a price-to-earnings growth (PEG) of 0.4 times suggests a target P/E of 13.7 times (from 12.5 times) applied to CY15 EPS to derive a revised TP of RM4.50 (from RM3.60),” it said.
RHB Research said BAuto is a beneficiary of Japan’s policy to competitively devalue the Japanese yen.
Every 10 sen change in the yen to the ringgit could impact net profit by about RM5mil. Domestic Mazda sales are on track to meet its FY15 sales target while the eagerly-anticipated Mazda 2 B-segment competitor is on schedule for a January 2015 launch together with the CKD Mazda 3.
“Weaker yen means better margins. The yen has depreciated 5.8% against the ringgit since mid-October, exacerbated by the Bank of Japan’s expanded monetary stimulus programme last week.
RHB Research revised its 100 yen to ringgit exchange rate assumptions to RM3.05 and RM2.80 for FY15 and FY16 respectively (from RM3.25), in line with its latest house exchange rate forecasts.
“The weaker yen also gives BAuto an advantage in vehicle pricing negotiations as Mazda Motor Corp can now offer more competitive pricing to BAuto in ringgit terms without sacrificing its profit margin,” it said.
The research house believes Mazda’s strong product suite will ensure continued market share gains. BAuto is in a net cash position and highly cash-generative, which could mean higher dividends or new earnings- accretive business streams.
http://www.thestar.com.my
KUALA LUMPUR: RHB Research is maintaining its Buy call on Berjaya Auto (BAuto) with a revised target price of RM4.50 from the earlier RM3.60.
It said on Tuesday BAuto is attractive for its undemanding valuations of just 9.2 times FY16 coupled with a three-year FY14-17 earnings per share (EPS) CAGR of 34.2%.
“Applying a price-to-earnings growth (PEG) of 0.4 times suggests a target P/E of 13.7 times (from 12.5 times) applied to CY15 EPS to derive a revised TP of RM4.50 (from RM3.60),” it said.
RHB Research said BAuto is a beneficiary of Japan’s policy to competitively devalue the Japanese yen.
Every 10 sen change in the yen to the ringgit could impact net profit by about RM5mil. Domestic Mazda sales are on track to meet its FY15 sales target while the eagerly-anticipated Mazda 2 B-segment competitor is on schedule for a January 2015 launch together with the CKD Mazda 3.
“Weaker yen means better margins. The yen has depreciated 5.8% against the ringgit since mid-October, exacerbated by the Bank of Japan’s expanded monetary stimulus programme last week.
RHB Research revised its 100 yen to ringgit exchange rate assumptions to RM3.05 and RM2.80 for FY15 and FY16 respectively (from RM3.25), in line with its latest house exchange rate forecasts.
“The weaker yen also gives BAuto an advantage in vehicle pricing negotiations as Mazda Motor Corp can now offer more competitive pricing to BAuto in ringgit terms without sacrificing its profit margin,” it said.
The research house believes Mazda’s strong product suite will ensure continued market share gains. BAuto is in a net cash position and highly cash-generative, which could mean higher dividends or new earnings- accretive business streams.
http://www.thestar.com.my
