For QE31/7/2016, BJAuto's net profit dropped 20% q-o-q or 21% y-o-y to RM41 million while revenue decreased by 8% q-o-q or 4% y-o-y to RM494 million. Revenue dropped q-o-q due to lower sales volume of Mazda vehicles in Malaysia and the Philippines. The decrease in sales volume of Mazda vehicles in Malaysia was mainly attributed to supply constraint on certain CKD models as the contract assembler's plant in Kulim was shut down for about five weeks for the upgrading works of its paint shop. In the Philippines, sale of its top selling Mazda3 model was affected by a competitor's newly launched model. In line with lower revenue, higher spending on advertising and promotion expenses, and marginal compression in gross profit margin, Group pre-tax profit for the current quarter decreased by RM14.7 million or 20.1%.
Table: BJAuto's last 8 quarters' financial performance
Chart 1: BJAuto's last 17 quarters' financial performance
Valuation
BJAuto (closed at RM2.25 yesterday) has a fair PER of 14 times (based on last 4 quarters' EPS of 16.36 sen). BJAuto paid good dividend, with an attractive dividend yield of 7.8%.
Technical Outlook
BJAuto has been moving in a gradual uptrend line, S1-S1 with support at RM2.20-2.30.
Chart 2: BJAuto's weekly chart as at Sep 14, 2016 (Source: Share Investors)
Conclusion
Based on good financial performance, good dividend yield and mildly positive technical outlook, BJAuto's rating is kept as a HOLD.
Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.
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