Maybank Investment Bank is of view Bermaz Auto expects small to flat sales volume growth for Mazda MY in FY25E due to a high base, as it focuses on driving Kia’s growth via a strong pipeline of new launches. Current backlogs are c.2k units, with >1.5k from Mazda. BUY on compelling valuation (8.2x FY25E PER) and >9% FY25E DY.
Key updates from post results briefing
For FY25E, BAuto expects flattish Mazda MY sales, coming from top CKD models like the CX-5, CX-30, and CX-8, as it explores hybrid options to diversify its offerings. Kia’s growth potential is high due to a low base, with new models such as the Sportage, Carens MPV, and Seltos SUV in the pipeline. The Kia CKD Sportage, which will be assembled at the Inokom
plant, is slated for launch by Jan 2025, targeting sales of around 5k units p.a.. Additionally, the XPeng G6 model is expected to launch by Aug 2024, enhancing the EV lineup, with sales projected at up to 700 units for FY25E.
Impact from diesel subsidy rationalisation
In BAuto’s portfolio, only the Kia Carnival is affected by the diesel subsidy rationalisation beginning on 10 June 2024. The estimated monthly diesel expenses for Carnival users may rise by MYR100-200. BAuto anticipates a short-term impact on sales, with recovery expected as conditions normalise. Meanwhile, the diesel-powered CX-5 sales account for only <5%
of the model’s total sales.
Strong fundamental with long term growth planned
Despite some short term headwinds, Maybank IB expects BAuto to remain largely resilient. It has successfully established the Mazda brand in the MY market and aims to replicate this with Kia, while also planning for LT growth. As Mazda moves into the premium segment, BAuto is exploring new JVs, likely with China OEMs, to address the mass premium market gap.
