BAuto Thrives in Robust Car Sales, Promising Future Models and Dividends

Photo of Mazda cars from Bermaz

BAuto is doing well with its vehicle sales, especially Mazda, and they are likely to achieve their sales target for the year. They have introduced new products like the updated Mazda 3 and have more launches planned. The company is not greatly affected by changes in currency exchange rates, and they have secured favorable rates for the Japanese yen.

In terms of financials, the company is in a strong position with a good amount of cash and healthy cash flows due to their efficient business model. They offer an appealing dividend yield, even with a conservative approach to dividend payouts. This means that investors can expect a good return on their investment.

BAuto Outlook

In simpler terms, the car distributor is doing well in the car sales business, and they have plans for more new car models. They are financially sound, and investors can expect a decent dividend.

“We continue to like BAuto for its solid fundamental and resilient financials, with a net cash position and strong FCFs (min. capex requirements on asset light business model). Growth is underpinned by its robust pipeline of new launches and increasing CKD mix, providing good earnings visibility.

“Even with our conservative assumption of 75% DPR (vs. hist. DPR of 78%-114%), BAuto already offer an attractive div. yield of >10%,” says Maybank.

Recap:

Sales are thriving post-Sales and Service Tax (SST) holiday, and they are on track to meet their 5MFY24 target of 24,000 vehicle sales, with a focus on Mazda. New products like the Mazda 3 and upcoming launches are boosting sales. They also have minimal exposure to currency risks and good financials. Despite a conservative dividend payout ratio, BAuto offers an attractive dividend yield of over 10%.