4 hours Ago
PETALING JAYA: Car buyers may want to switch to cheaper brands, but Bermaz Auto Bhd ’s contrarian approach of maintaining its prices is likely to help preserve its appeal in the second-hand market. In a report, RHB Research said competition has indeed tightened from the influx of China’s marques, and Bermaz Auto has not been immune to the price war. However, its value is undemanding, trading at 6.
2 times, below its historical mean. The research house said the carmaker expanded into the electric vehicle (EV) market by offering new distributorship of two Chinese brands, Xpeng and Deepal. “Xpeng, which launched last August, managed to sell about 400 units of G6 in 2024, most of which were delivered in the fourth quarter of last year.
Deepal, on the other hand, will make its local debut in the second half of 2025, with its SUV model S07,” it said. RHB Research said given the still-niche EV market on top of the booking rate of circa 100 units per month by XPeng, it does not believe these brands will be a major contributor to Bermaz Auto’s earnings. On the Mazda brand, the research house said it delivered 14,800 units in 2024, which was 25% lower year-on-year.
“This decline is mainly contributed by increased competition, specifically within the non-national market segment, as Chinese carmakers gained a foothold in the local automotive scene,” it said. This was evident by the declining market share to 1.8% last year for Mazda, as another Chinese brand, Chery gained a market share of 2.
4% and became the most popular non-national brand after Toyota and Honda in 2024. Additionally, Kia’s performance dropped 45% year-on-year in 2024, due to intense market dynamics as well as the diesel subsidy removal that put a dent particularly for its diesel-powered Carnival. “However, it recently launched the Kia Sportage in December with a competitive price tag.
Ranging from RM147,000 to RM187,000, we think this would be a volume-heavy model. However, considering the launch was later than we expected, we believe its impact to earnings will materially be seen in FY2026F,” RHB research noted. That said, the research house said it will maintain its buy call on the carmaker with a lower target price of RM2.
30 from its previous price of RM2.65. It said it will also maintain a 70% upside for the carmaker with a 13% yield for this year.
The research house noted the carmaker’s share price that plummeted 42% in the last 12 months was overdone, but now its valuation is very appealing while its 13% yield remains attractive. “We revise down our financial year 2025 (FY25) to FY27 by 11% to 14% as we cut our Kia volume forecasts and increase operating expense assumptions given our over-bullish estimates previously. "We keep our Mazda volume assumptions unchanged as eight months of 2025 volumes are in line with our FY25,” the research house added.
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