Plenty of room for Berjaya Auto to zoom up, says RHB Research

by **Cals** Tue 11 Mar 2014, 11:03

Plenty of room for Berjaya Auto to zoom up, says RHB Research
Business & Markets 2014
Written by Jonathan Gan of theedgemalaysia.com
Tuesday, 11 March 2014 10:28

KUALA LUMPUR (Mar 11): RHB Research has maintained its Buy rating on Berjaya Auto Bhd and said it remains positive on the company’s outlook in view of its strong new model pipeline and higher plant utilisation rates.
In a note today, Alexander Chia, director at RHB Research Institute said “We remain positive on BAuto’s outlook in view of its strong new model pipeline, expansion of its completely knocked-down (CKD) operation with the imminent commissioning of its Inokom production facility, and improved production efficiencies from higher plant utilisation rates”
Chia reiterated his “buy” rating on Berjaya Auto Berhad with an unchanged fair value (FV) of RM2.20 following the company’s impressive quarterly results announcement yesterday.
The company’s net profit rose 376% year-on-year to RM 30.6 million in the third quarter ended Jan 31, 2014 from RM6.4 million
For the nine- month period, net profit recorded RM84.3 million versus RM27.5 million in the previous corresponding year.
The research house believes there is still “plenty of room to zoom up” for the stock.
It maintains BAuto as the top pick for in the sector.
“We reiterate our Buy call and leave our RM2.20 FV unchanged, derived from a target price earnings of 12.5 times on FY15 earnings. BAuto remains our top pick in the sector.”
At 9:36 am, Berjaya Auto rose 3 sen to RM1.89 per share with 1.9 million shares traded.