BJAUTO still our pick for the sector, with investment merits backed by its: (i) better growth prospect from low base on the back of strong pipeline of exciting models, (ii) relatively stable margins, benefitting from the lower import duties from FTA with Japan, and (iii) potential dividend payout of 56%, which translate into c.6.1% dividend yield. BJAuto is currently trading at an undemanding valuation of 9.1x forward PER, which is at a steep discount of 35% against its industry average forward PER of 14.0x.
Auto: TPPA stepping stone for local auto players to get into global market. Trans-Pacific Partnership Agreement (TPPA) is a stepping stone for the local automotive industry to tap into global markets, including US, Japan, Canada and Australia, according to Frost & Sullivan. "The challenge for Malaysian automotive market has always been the scale. That's why the domestic players always feel under threat," Frost & Sullivan's VP of the automotive & transportation practice for Asia Pacific, Vivek Vaidya said. (SunBiz)
Valuation We made no changes to our TP of RM2.63 given the immaterial earnings contribution to FY17E. Our TP is based on an unchanged targeted PER of 12.4x, which is also at +0.5x above its 2-year average forward PER.
tehcnically positive all the way....set to move towards 2.80-3.00...depending on market forces and if there is a breakthru in all ressistance level.....
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Keong Teoh
106 posts
Posted by Keong Teoh > 2016-01-04 16:51 | Report Abuse
No long term stock if you buy high.