Bermaz Auto Berhad (BAuto) has reported a significant decline in its first-quarter financial results for the fiscal year 2026, with core net profit plummeting 87% year-on-year to MYR8.8m. The results, which fell short of expectations, were attributed to a 42% drop in revenue and a 48% decrease in vehicle sales, largely due to the absence of new launches and intensified competition in the mass premium segment.
Maybank IBG Research has revised its earnings forecast for BAuto, cutting the fiscal year 2026–2028 estimates by 64%, 46%, and 46%, respectively. The target price has been adjusted to MYR0.68, reflecting a shift in valuation methodology from price-to-earnings ratio (PER) to price-to-book (PB) ratio, which better aligns with BAuto’s strong balance sheet and cash-generative model. The company maintains a net cash position exceeding MYR180m, representing approximately 29% of its market capitalisation.
Despite the challenging quarter, BAuto declared a dividend of 0.75 sen per share, indicating a 105% payout ratio and offering a 5% yield. The company anticipates a potential recovery in margins from the second quarter of fiscal year 2026, supported by renewed principal support from Mazda starting in July 2025.
Looking ahead, BAuto faces a challenging market environment with increasing competition from Chinese brands affecting its Mazda and Kia sales. However, the company has seen an increase in order backlogs, notably for the Mazda CX60 and Mazda 3 models. Maybank IBG Research maintains a ‘Hold’ rating on BAuto, citing the company’s robust balance sheet and dividend capacity as key factors providing downside protection.
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