Berjaya Auto Likely To Continue Its Upward Surge, Says CIMB Equities Research

Berjaya Auto has been on quite a strong run and CIMB Equities Research doesn’t see it slowing down, at least in the short term. This news is sure to boost confidence in the minds of investors who are already enjoying the upward trajectory over the past fiscal year. 

According to the research firm, Berjaya Auto’s growth boost can be attributed to the recent launch and strong market reception to the new Mazda2 hatchback, amongst the very successful CX-5 CKD, and also its previous fully-imported models launched in 2014, such as the Mazda Biante, Mazda 3 and Mazda CX-5 2.5L.

Looking forward, the upcoming launches of new models such as the Mazda CX-3, Mazda 3 CKD, a facelifted Mazda CX-5, and Mazda 6 is expected to continue the company's firm ground and push its peers harder as 2015 rolls on.

*You can read more about Mazda's coming models here: 2015 Mazda 3 CKD, 6 And CX-5 Facelifts Due For April Launches, Sources Say

High volume sales of Mazda vehicles were the main catalyst that Berjaya Auto said was instrumental in their on-year profit leaping to RM160.1 million, a 90.1% increase, as a result of an on-year surge in revenue to RM1.4 billion.

Mazda 2 and Mazda 3 proves to be selling very well in the Philippines too, spurring growth in a market that is steadily becoming of increased significance on Berjaya Auto’s bottom line.

According to Berjaya Auto, “It continues to reward its shareholders with consistent dividends. Its 3.35sen dividend per share brought its total declared dividends for FY15 to 8.60 sen per share, translating into a 43.4% payout ratio, and consistent with its 40% dividend policy. And even with the consistent dividends and after its 20%-stake acquisition in Inokom for RM30mil, BAuto still managed to increase its cash position to RM319mil from RM313mil as at end-1HFY15. This strong cashflow is achievable due to the group’s asset-light policy and zero gearing.”

*Source: The Star