MORNING CALL:18/12/23

Bermaz drives away as Maybank IB’s top pick for the auto sector

Transcript

00:00 Happy Monday, we are taking a look at Burma's auto today with Maybank IB calling it its

00:06 top pick for the auto segment universe.

00:08 It is keeping both its buy call and RM3.51 target price, implying a possible upside of

00:13 47% from current levels.

00:16 The company anticipates sustained growth into FY25 driven by a robust pipeline of new launches,

00:22 an expanding CKD mix and a strategic focus on niche markets with higher margin models.

00:27 Vee Auto is proactively engaging with its principals to bring additional models to the

00:31 Malaysian market, namely Mazda CX-60, Kia Sportage, Peugeot 408, etc. to expand sales.

00:39 Its efforts to lift sales extend to exploring potential partnerships with pure Chinese BEV

00:43 brands, presenting an opportunity to tap into a burgeoning segment.

00:47 A potential monkey wrench in the whole thing could be the high-value goods tax set to take

00:52 effect in May next year, pending details.

00:55 The primary impact on Vee Auto is anticipated to centre around its Kia Carnival model, but

01:00 Maybank IB thinks that after the initial knee-jerk reaction, it could be cushioned by the introduction

01:05 of new models throughout the year.

01:07 Ultimately, Maybank IB likes Vee Auto's robust fundamentals and strong dividend payout.

01:12 Burma's is well covered and according to the latest Bloomberg data, there are 10 buys

01:16 and 4 holes on the auto stock that managed to temper the overall outlook a little.

01:20 The average target price works out to RM2.98, which is 59 cent more than its last close.

01:27 [Music]