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AmResearch maintains Buy on Berjaya Auto, raises fair value to RM3.70

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AmResearch maintains Buy on Berjaya Auto, raises fair value to RM3.70 Empty AmResearch maintains Buy on Berjaya Auto, raises fair value to RM3.70

Post by Cals Tue 09 Sep 2014, 17:23

AmResearch maintains Buy on Berjaya Auto, raises fair value to RM3.70
Business & Markets 2014
Written by theedgemalaysia.com   
Tuesday, 09 September 2014 09:41

KUALA LUMPUR (Sept 9): AmResearch has maintained its Buy rating on Berjaya Auto Bhd (BAuto) at RM2.90 with a higher fair value of RM3.70 (from RM3.10) and said BAuto’s 1Q15 beat expectations.
In a note Tuesday, the research house said the company reported a 1Q15 core net profit of RM59 million, accounting for 33% and 32% of house and consensus estimates.
“We raise our FY15F/16F/17F earnings by 14%/22%/9% to factor in:- (1) Higher margins from better FOB pricing and sales mix, (2) JPY rates at 3.12-3.13 from 3.18, (3) Higher IAF for the CKD CX5, (4) Better-than-expected volume and margins at Berjaya Auto Philippines (BAP).
“BAuto is deeply undervalued at just 10x CY15F earnings (well below sector CY15F PE of 12x) despite strong earnings outperformance, net cash position (RM195mil) and a 23% 3-yr EPS CAGR.
“Key near-term catalysts: (1) Potential M&A to expand manufacturing presence, (2) Inokom capacity expansion, (3) Mazda 3 CKD in Feb 2015,” it said.
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