BAuto earnings miss prompts analysts to cut forecasts
KUALA LUMPUR: Analysts have revised down their net profit and earnings projections for Bermaz Auto Bhd (BAuto) following a weaker-than-expected financial performance.
According to CIMB Securities, BAuto's results for the fourth quarter of financial year 2025 (4QFY25) fell short, achieving just 95 per cent of its own forecast and 94 per cent of consensus estimates. The miss was largely attributed to a softer contribution from associates than initially anticipated.
As a result, CIMB Securities has revised its net profit projections for financial years 2026 and 2027 (FY26/FY27) downward by 21 to 29 per cent, citing lower associate earnings and tighter margins stemming from a projected decline in sales volume.
The firm now anticipates Mazda sales volume to grow by a modest 5 per cent year-on-year (YoY) to 12,000 units in FY26, supported by the planned launch of the CX-60 and CX-80 models in the second half of calendar year 2025 (2HCY25).
"However, the rebound could come at the expense of margins owing to increasing competition for its flagship CX-5 and CX-30 models in the RM100,000–200,000 segment," it said in a note.
CIMB Securities noted that Bermaz Auto delivered 824 units of the XPeng G6 and X9 electric vehicle models in the first eight months of the financial year ending in April 2025.
The firm expects a stronger contribution from XPeng in the financial year ending in April 2026, supported by a full-year sales impact and the potential introduction of new models.
"We estimate XPeng could contribute between RM15 million and RM20 million to the group's pre-tax profit in FY26.
"Beyond XPeng, BAuto is also looking to launch three new EV models under Deepal marques in 2HCY25: the Deepal S07, S05, and E07," it said.
Meanwhile, Hong Leong Investment Bank (HLIB) said it has downgraded its earnings projections for FY26 and financial year 2027 (FY27) by 31.4 per cent, citing a deteriorating automotive outlook with lower anticipated sales and profit margins.
HLIB noted that the launch of the XPeng G6 and X9 contributed to supporting the group's margins for the quarter, partly mitigating the softer performance from the Mazda and Kia brands.
"However, competition in Malaysia is expected to intensify with the influx of Chinese original equipment manufacturers (OEMs) offering feature-rich models at competitive prices.
"Similarly, operations in the Philippines continued to face mounting pressure from Chinese entrants," it added.
HLIB has lowered its recommendation on BAuto to 'Sell' from 'Hold', cutting its target price to 78 sen from RM1.05.
Despite the downgrade, the firm noted that BAuto continues to have a solid balance sheet, with a net cash position of RM207.2 million (equivalent to 17.8 sen per share) as of the end of FY25, which supports ongoing dividend distributions.
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