Bermaz Auto Eyes Recovery Amid Competitive Pressures

Bermaz Auto Bhd (BAuto), assembler and distributor of Mazda and Kia vehicles in Malaysia, is gearing up for stronger performance in the coming quarters, supported by an expanding model line-up and new electric vehicle (EV) offerings.

The Malaysian automotive landscape has become increasingly competitive with the aggressive entry of Chinese brands. This has led CGS International to revise BAuto’s earnings forecast for Q1 2025, lowering projections by up to 26% due to pricing pressures.

However, analysts believe the company remains well-positioned for recovery. While overall vehicle sales in Malaysia grew by 2% last year, Mazda’s sales dipped 24%, according to Malaysian Automotive Association (MAA) data.

In contrast, Chery and BYD expanded their market share from 1% to 3.5% in the same period.

Despite the competition, Mazda’s best-selling CX-5 continues to attract buyers due to its strong brand reputation and reliable aftersales support, despite being slightly pricier than many new entrants.

Investor sentiment has been cautious, with BAuto’s stock declining over 30% since December due to concerns over heightened competition. Analysts have adjusted their outlook accordingly, with the consensus target price dropping by over 25% to RM2.05.

Bloomberg data shows eight research houses maintain a ‘buy’ rating, six a ‘hold,’ and one a ‘sell,’ with FY2025 core net profit estimated at RM230.5 million.

Looking ahead, CGS International expects BAuto’s sales volume to improve from July, driven by the launch of the new Xpeng X9 and three Deepal EV models. The company is also set to expand its Mazda lineup with the highly anticipated CX-60, scheduled for release in Q2, followed by the larger CX-80 in Q3 2025.

Meanwhile, the Xpeng G6, launched in late 2023, is performing steadily, averaging 120 units in monthly sales.

Despite these short-term challenges, CGS International remains optimistic about BAuto’s long-term prospects, expecting earnings growth from FY2026, supported by a broader product portfolio. At RM1.30 per share, BAuto holds a market capitalisation of RM1.5 billion and remains an attractive investment with a strong 10% dividend yield.