Berjaya Auto Bhd ("BJAuto") is the official distributor of Mazda cars and spare parts in Malaysia and the Philippines. It is involved in the assembly of Mazda CKD vehicles via 30%-owned associate company, Mazda Malaysia Sdn Bhd; distribution of Mazda CKD vehicles via 100%-owned subsidiary, Bermaz and the exportation of locally-assembled Mazda to Thailand.
Mazda vehicles have gained widespread acceptance due to its design language as well as efficient engines.
Recent Financial Results
BJAuto's top-line and bottom-line have been rising steadily over the past 8 quarters. The improved earnings is driven by increased sale volume as well as higher profit margin.
Chart 1: BJAuto's last 9 quarterly results
For QE31/7/2014, BJAuto's net profit increased by 17% q-o-q or 115% y-o-y to RM56 million while revenue increased by 29% q-o-q or 19% y-o-y to RM508 million.
Table: BJAuto's last 8 quarterly results
Valuation
BJAuto (closed at RM2.90 yesterday) is now trading at a PE of 14.5 times (based on last 4 quarters' EPS of 20 sen). Based on 20% earning growth, the PEG ratio is at attractive 0.73 times.
Technical Outlook
BJAuto broke above the upward channel at RM2.80 yesterday. With this breakout, BJAuto's uptrend is likely to accelerate.
Chart 2: BJAuto's daily chart as at Sep 8, 2014 (Source: Chartnexus)
Conclusion
Based on good financial performance, attractive valuation & bullish technical outlook, BJAuto is rated a BUY.
Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, BJAuto.
Hi Alex,
ReplyDeleteI'm planning to have a long term investment and the options I have is TNLOGIS, TROPICANA, IGB REIT & PANTECH.
In your opinion, which counter will have the long term growth potential.
Thank you.
Martin, I personally prefer tnlogis among the ones u picked =P
ReplyDeleteHi Mr Lu,
I would like to check with you. Do you expect a big correction these coming weeks?
Weak sentiments all over.
Can you comment on PSIPTEK? It is a healthy and undervalue company.
ReplyDeleteHi Dav C
ReplyDeletePSIPTEK needs to break above RM0.40 to move higher. MACD & RSI seem poised to swing up.
You either buy on breakout above RM0.40 or on pullback to support of RM0.30.
Hi martinkakashi
ReplyDeleteMy take on:
1) TNLOGIS did well on one property development project. Will there be more? Good support at RM1.25-1.27.
2) TROPICANA has multiple property development projects. It should do well if property market recovers. Technically speaking, it is in a long-term uptrend line, with support at RM1.25.
3) IGB REIT has broken above its intermediate downtrend line and could be at the start of an uptrend. Immediate resistance at RM1.30-1.31. Fundamentals of this REIT are very sound, with good potential for higher rental rates.
4) PANTECH is in an uptrend line, with support at RM1.00.
Based on technical consideration, I will go with Pantech & Tropicana. IGBReit is relatively safe and would be a good buy at RM1.25.