BJAuto: Earnings & Revenue Dropped

Results Update

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:

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