Bermaz Auto (Bauto) could benefit from the stronger Malaysian ringgit. Here are a few reasons why:
Lower Import Costs: A stronger ringgit means that the cost of importing vehicles and parts from countries with weaker currencies, like Japan, will be lower. This can improve Bauto’s profit margins. Competitive Pricing: With reduced costs, Bauto might be able to offer more competitive pricing on their vehicles, potentially increasing sales volumes. Improved Earnings: The overall financial performance of Bauto could see a positive impact due to lower costs and potentially higher sales, leading to improved earnings. Investor Confidence: A stronger ringgit can also boost investor confidence in Malaysian companies, including Bauto, which might positively influence their stock price.
BAuto has been enjoying stellar results from high margins and strong volumes over so many years that people may sometimes forget automotive is a cyclical business with a product life cycle of 7 years at most. Yield and valuation may be low but earnings are far from clear, hopefully new CX-5 will come soon, their bread and butter but even then the China cars will continue to bombard.
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Selldown because of worrying ex div tomorrow would be the usual worse selldown. XPeng is among top ten popular EV car. But don't know how saleable it is locally.
It is possible too some people may mistaken today is cum dividend, otherwise the drop can be more severe. However, BAuto is a very high yield dividend stock. Government is very committed to boost uses of EV cars and speed up setting of EV charging points throughout the country. The management should be flexibly able to shift its focus to sales of EV cars, I believe.
price drop is linked directly to remove subsided RON 95---However from what i heard from politicians, only 50% are affected----Those earnings below $3000/month, Gov is going to e-wallet subsidy----For sure many above 3000 will receive subsidy too ( politician buying votes )----most chinese will Not received any thing but these are working people, dont roda-roda ( they lepak in office )--I think if you are using Honda Cub, you hardly feel any pinch but instead receive more in the form of subsidy------So what industries get hit most, Local Tourist Spots and fishing kaki like me ( have to travel 100km to fish a tilapia
For Ron95 subs removal, I think it's a long term strategy to electrify EV via national cars. Foreign brands will benefit from it as there are different levels of buyers. Just my guess.
Time to average with low share price in hope that Xpeng will do good sales ...
hybrid Cars are using just 50% petrol ( even less in new engin design ) Japan will do everything to move away from Chinese dominating EV---rotary engine by Madza uses less than 30% petrol based on current model-----What we see ( i guarantee ) in 2025 onwards most Cars in Malaysia will run on 3 cylinder below 1.0L engine ( maybe just 500cc --300cc )-----1.5L engine will be dinosaur very, very soon ( my worry my car sparts )
Petrol Car will still rule Malaysia Roads----My son regretted buying a Tesla. Every other day 4 hours charging Bat. 2025 budget has NO announcement to implement Charging stations plan ( has no idea what to do bcos PM is driving Petrol Car
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....
ahbah
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Posted by ahbah > 1 month ago | Report Abuse
Bermaz Auto (Bauto) could benefit from the stronger Malaysian ringgit. Here are a few reasons why:
Lower Import Costs: A stronger ringgit means that the cost of importing vehicles and parts from countries with weaker currencies, like Japan, will be lower. This can improve Bauto’s profit margins.
Competitive Pricing: With reduced costs, Bauto might be able to offer more competitive pricing on their vehicles, potentially increasing sales volumes.
Improved Earnings: The overall financial performance of Bauto could see a positive impact due to lower costs and potentially higher sales, leading to improved earnings.
Investor Confidence: A stronger ringgit can also boost investor confidence in Malaysian companies, including Bauto, which might positively influence their stock price.