According to UOB Kay Hian (UOBKH) Research, this outlook is bolstered by healthy backorders and new orders, as well as continuous launches of new models and brands.
“We expect the group to offer an attractive dividend yield of 9% (22 sen per share), including the expectation of a special dividend payout in 2H24,” said the research firm.
UOBKH Research expects the positive momentum of its Malaysian operations to continue and assume sales of 20,758 units in FY24 versus 19,688 units in FY23.
“The Philippines’ operations have shown a substantial improvement in the latest 1H24, driven by a higher number of vehicles sold at 1,340 units, which resulted in a higher revenue of RM189.3mil.
“This improvement will be further expanded by the launch of premium category models, including the CX60 and CX90, which are aimed at enhancing its product mix as well as its margin,” said UOBKH Research, which anticipates the Philippines’ sales volume to improve by a three-year compounded annual growth rate of 9.1%.
Moving into 2H24, it expects earnings to be slightly lower by 28%, due to the high base in 1H24. However, it expects revenue and earnings to grow by 12.8% and 2.4% year-on-year, respectively, in FY24 assuming the group achieves record-high sales in FY24.
On dividends, it notes that BAuto has a minimum 50% profit after taxation and minority interest dividend policy. The group declared a second interim dividend of five sen per share, bringing the total dividend for 1H24 to 10 sen per share.
“As a net cash company, we assume BAuto will reward shareholders with another special dividend this FY24, with an expected dividend payout of 22 sen per share. Including the special dividend, this translates to a dividend yield of 9% for FY24.”
It maintains a “buy” call on the stock with a RM3.22 target price.
