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Friday, 20 February 2015

Berjaya Auto Berhad: 5248 - Banking on upcoming Mazda Models

Dear Friends,

Happy Goat Year to All! From some of the 4Q reports announced lately, we some weaker performances. We still remain CAUTIOUS even tough oil price is stabilizing. We are more stringent on our stock selections.

Berjaya Auto:

Rolling 4Q EPS : 3.88 (Jan 2014) + 5.97 (April 2014) + 6.95 (July 2014) + 7.12 (Oct 2014)
                          : 23.66

* The EPS has been on an uptrend since IPO Listing (from 3.88 to 7.12). If you look at it more closely, BJAuto is introducing Mazda 2 (Jan 2015), Mazda 3 (March 2015), improved version of Mazda 6, CX-5 and CX-3. Looking at this scenario, they should be able to cushion up against the challenging 2015. I believe with weakening yen, the upcoming Jan 2015 Quarterly report should be okay.

Rolling 4 Quarters P/E: 3.45 / 23.66
                                    : 14.6x

With Mazda 2 launched, assuming BJAuto able to maintain EPS 6.95 + 7.12 for the next 2 Quarters (of course with the help of other new models)

Forecast Forwarded P/E: 3.45 (Price)/ 28 EPS
                                      = 12x (acceptable)

Dividends given on 2014: 0.0875
Dividend Yield               : 2.5%  (comparable to money market deposits)

Although this stock might not be a trade able hot stock, nevertheless it is a safe stock. Better be cautious than overly optimistic.

Happy trading!

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