Slew of Mazda model launches makes Bermaz Auto top pick for September

By THE STAR | 23 September 2019

KUALA LUMPUR: Kenanga research expects car sales in September to be supported by the higher delivery of new models from Perodua, Honda, Toyota, Proton and Nissan, and will continue to be higher year-on-year owing to the weak demand post tax holiday last year.

However, automotive sales volume is expected to be weaker in September as compared to August because of the spate of public holidays this month.

The research house maintained its 2019 total industry volume target at 600,000 in line with MAA's forecast and expects the exciting new launches to offset the lack of sales-boosting events such as the one-off 2018 tax holiday.

It continues to favour Bermaz Auto (BAuto) as its top sector pick with a target price of RM2.75 due to expected earnings recovery form the stream of all-new models, superior margins and steady dividend yield of 7.2%.

"BAuto will launch its popular facelifted and turbo variants of CX-5 on 30th Sept, and all-new Mazda CX-8 on 1st Oct. "BAuto is also looking to bring in the all-new CX-30 (CBU from Thailand) and facelifted CX-3 (CBU) in Dec 2019," it said.

To recap, automotive sales in August came to 51,148 units with only Proton registering higher month-on-month growth due to its popular Proton X70 and supported by its Saga, Iriz and Persona facelifts.

Sales plunged y-o-y due to the higher base effect from the tax holiday between June 1 and Aug 31, 2018.

Perodua surfaced as the only gainer with a 13% increase in sales y-o-y.

Nissan had the worst sales performance, falling 11% m-o-m and 48% y-o-y due to a lack of all-new model launches to spur demand and lower traction from Nissan X-Trail facelift.

Following the August performance, Perodua continues to lead with a higher market share of 41% as compared to 37% in August last year.

Honda's market share slipped to 15%, and tied Proton in second place as the latter improved its sales performance.

Toyota and Nissan both experienced lower market share of 11% and 3% respectively, while Mazda maintained its market share at 2%.