Hot Stock Berjaya Auto marches to all-time high on sanguine prospects

by **Cals** Thu 18 Sep 2014, 21:53

Hot Stock Berjaya Auto marches to all-time high on sanguine prospects
Business & Markets 2014
Written by Kamarul Anwar of theedgemalaysia.com
Thursday, 18 September 2014 13:31

KUALA LUMPUR (Sept 18): Berjaya Auto Bhd (BAuto) rose as much as 4% to its all-time high as investors bought into the automobile distributor's growth story. Investors had also chased BAuto shares before the stock trades ex-dividend next Tuesday (Sept 23).

Today, BAuto settled at RM3.18 at 12.30pm with some 1.7 million shares done. The stock had earlier risen as much as 13 sen to RM3.20, its highest intraday price since the company was listed on Bursa Malaysia on November 18, 2013 at 70 sen each.

BAuto had bucked the FBM KLCI's negative trajectory today. The KLCI declined 5.04 points or 0.3% to 1,838.74 at 12.30pm

BAuto is a favourite among analysts. AmResearch Sdn Bhd's analyst Hafriz Hezry said,in a report today, BAuto remained the stock broking house’s top pick for the automobile sector.

Hafriz said BAuto's potential acquisitive growth provided strong short-term earnings catalyst for the company.

“As it is, we are already looking at a three-year earnings per share compound annual growth rate of 23%, without factoring in potential earnings uplift from the CX3 or enhanced manufacturing earnings. Market expectations are low with the stock trading at just 11 times CY15F price-earnings ratio.

“We see increasingly valid reason for BAuto to increase its presence in manufacturing and if this materialises, it could provide a strong immediate-term catalyst for the stock," he said.

Hafriz maintained AmResearch's "buy’ call” on BAuto shares with an unchanged target price of RM3.70.

BAuto's latest financials had improved. Net profit more than doubled to RM56.1 million in the first quarter ended July 31, 2014. Revenue was higher at RM507.95 million.

The company has proposed a dividend of two sen a share for the quarter in review.