KUALA LUMPUR: Sales of Mazda vehicles here by Bermaz Auto Bhd last month could test historical high levels of 1,300 to 1,400 units as orders resumed into the new year and given strong demand for the new CX5, MIDF Research said.
This is despite Bermaz having raised the CX5 price by RM1,000 last month.
MIDF Research estimated Bermaz’s third quarter total industry volume (TIV) at 3,000 units, up 19 per cent sequentially and a whopping 37 per cent year-on-year, with outstanding bookings of the new CX5 currently standing at more than 900 units.
More importantly, it said the strong TIV will come with improved margins given the price hike for the CX5 in January this year and minimal discounting.
“We estimate this will impact (Bermaz’s) annual earnings by two per cent based on our conservative financial year 2019 CX5 volume of 6,000 units. This is likely to trickle through meaningfully from fourth quarter 2018,” it said.
MIDF said associate earnings, comprising 30 per cent-owned Mazda Malaysia Sdn Bhd (MMSB) and 29 per cent-owned Inokom, had been dismal in the past two quarters given low production and run-out of the old CX5.
“We expect this to improve from second half 2018 driven by launch of the new CX5 and commencement of exports of the same model to Thailand, Indonesia and the Philippines.
“We gather CX5 export rate to Thailand is now 1,000 units per month while production for Malaysia is at 900 per month. At this rate we estimate total MMSB production could rise to 23,000 per annum from 9,500 to 10,000 in financial year 2016 and 2017,” it said.
Given a combination of the factors, including weaker Japanese yen, MIDF said Bermaz’s Q3 2018 earnings to rise by more than 50 per cent quarter-on-quarter, underpinning its view of an earnings gap-up from second half of 2018.
MIDF has re-affirmed its “buy” call on Bermaz and raised target price to RM2.70 from RM2.50 previously.