KUALA LUMPUR: AllianceDBS Research has reiterated a “buy” call on Bermaz Auto Bhd shares on continuation of strong show of earnings in the third quarter of the financial year 2019.
BAuto is the official distributor of Mazda cars and spare parts in Malaysia and the Philippines.
“There is room for potential upside to earnings with sport-utility-vehicle (SUV) sales as the engine of growth,” it said in a note.
The research house expected strong earnings momentum to continue, supported by high bookings and new launches.
“SUV’s rising popularity to benefit BAuto – led by new CX-5 and upcoming CX-8 launches,” it said.
AllianceDBS Research said sales of four-wheel-drive (4WD)/SUV models in Malaysia have outperformed industry growth since 2016, and at the same time, Mazda’s market share in that segment expanded exceptionally from nine per cent to 12 per cent.
AllianceDBS Research reiterated BAuto’s share with a target price of RM3.00.
At 10.49 am, Bermaz Auto’s share price eased one sen to RM2.19 with 148,300 lots changing hands.