Having imputed a weaker JPY/MYR, our FY15/16/17 forecast is lifted by 11%/16%/17%.
Reiterate BUY with higher TP of MYR4.35 (+24%), pegged to higher CY15 PER target of 13x (from 12x) given its superior growth (37% 3-year earnings CAGR) and low PEG of 0.4x.
The JPY weakened to a six-year low against the USD after Bank of Japan (BoJ) announced a massive ramp up of its stimulus programme last Friday. Consequently, the MYR strengthened to MYR2.93/JPY100 vs MYR3.12/JPY100 at the start of the year and we see BAuto as the prime beneficiary within our auto space, for all of its imported cost is denoted in JPY (60-65% of COGS).
Management had previously guided that they had hedged their position at MYR3.09/JPY100 for purchases from May 2014 to Feb 2015. As a result of the weaker yen outlook, we now impute a lower average of (i) MYR3.07/JPY100 for purchases in FY4/15 and (ii) MYR2.95/JPY100 for purchases in FY16-17 (from MYR3.13/JPY100 previously). Correspondingly, our FY15/16/17 net profit is lifted by 11%/16%/17%.
BAuto’s growth trajectory (37% three-year earnings CAGR) is on track and superior to its peers’ average three-year CAGR of 6%. Valuations remain undemanding at 11x CY15 PER and 0.4x PEG, backed by 2+% yield. As such, we believe that a higher PER target of 13x (vs peers at 12x PER target) is in fact justifiable.
Other potential catalysts include: (i) stronger-than-expected demand for the soon-to-be-launched Mazda2 and Mazda3 CKD, (ii) surging TIV in the Philippines (+28% YoY in 8M14) and (iii) exclusive distributorship award for Mazda cars in Indonesia.
Source: Maybank Research - 4 Nov 2014
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Created by kltrader | Oct 11, 2012
Created by kltrader | Oct 11, 2012
calvintaneng
WEAK YEN IS GOOD!
BUT THESE ARE BETTER REASONS
1) MAZDA CX 5 IS USING THE LATEST CUTTING EDGE FUEL EFFICIENT TECHNOLOGY FROM JAPAN! Toyota is using 10 year old technology & Honda CRV is 5 year old technology.
For Mazda Cars they only consume half the petrol compared to others.
2) MAZDA 2 Has Been Awarded "JAPAN CAR OF THE YEAR FOR 2015" Beating Merc Benz C Class into 2nd Place. So Mazda is the World Champion!
2014-11-04 11:19