Report: New Mazda Models Could Rev Up BAuto’s Prospects

Bermaz Auto Bhd (BAuto), the distributor of Mazda and Kia vehicles in Malaysia, is facing a tough road ahead. Analysts have lowered their expectations for the company, citing weaker sales, tighter profit margins, and growing competition from Chinese car brands.

Maybank Investment Bank Research has kept a “hold” rating on BAuto but cut its target price to 96 sen from RM1.06. It said BAuto’s sales are slowing after a strong two-year period, and Chinese carmakers are making it harder for Mazda and Kia to compete in the mass premium segment.

BAuto reported a core net profit of RM157 million for the financial year ending April 2025. This was slightly below expectations, prompting Maybank IB to reduce its profit forecasts for FY26 and FY27 by 10% and 13%, respectively.

The company has mostly cleared its backlog of orders. However, it could get a boost from XPeng and Deepal, two Chinese EV brands that BAuto secured distribution rights for in late 2024.

Despite the cautious outlook, BAuto is still offering an attractive dividend yield of over 9%, based on a 70% payout ratio.

RHB Research also maintained a “neutral” rating but reduced its target price to 86 sen from 95 sen. It believes strong competition in the non-national car segment will continue to affect BAuto’s sales. The research firm cut its Mazda sales forecasts for FY26 and FY27, now expecting market share to fall to 1.4% in 2025 from 1.8% in 2024.

Still, RHB sees value in holding the stock because of its high expected yield of 11% in FY26.

MIDF Research downgraded BAuto to “neutral” from “buy” and slashed its target price to 86 sen from RM1.43. It lowered earnings estimates by 20% for FY26 and FY27, expecting lower sales and reduced profit margins. The firm also removed any expected income from Deepal, saying its launch may be delayed, and lowered the expected dividend payout to 65%.

Hong Leong Investment Bank (HLIB) was even more pessimistic. It downgraded BAuto to “sell” and dropped its target price to 78 sen from RM1.05. HLIB said competition from Chinese brands is heating up in both Malaysia and the Philippines, putting pressure on BAuto's sales and profits.

HLIB cut its earnings forecast by over 31% for FY26 and FY27. However, it acknowledged that BAuto still has a strong financial position, with RM207.2 million in net cash, which helps support dividend payouts.

CIMB Research kept a “hold” call but reduced its target price to 80 sen from RM1.10. It noted that Chinese brands like BYD and Chery are taking market share away from Japanese brands, affecting Mazda’s sales.

CIMB expects Mazda sales to rise slightly in FY26, helped by the launch of new models like the CX-60 and CX-80. But it warned that profits could suffer due to tough competition in the RM100,000 to RM200,000 price range, especially for the popular CX-5 and CX-30.

That said, we at Carz.com.my are not financial analysts like the research houses above, but as automotive industry observers, we believe there’s one key point being overlooked: the potential of BAuto’s upcoming Mazda models.

The new 2025 Mazda 3 1.5 High Plus and the CX-60 are both set to shake up their segments. With prices of RM119,000 and RM199,000 respectively, they could be the most attractive offerings in their class offering strong value, premium appeal and Mazda’s solid reputation. These new models could surprise on the upside and help BAuto regain some momentum in the coming months.

While the near-term outlook remains cautious, these upcoming launches could provide a meaningful counterweight to the current headwinds.

Source: The Star