Bank Negara Malaysia declared a RM5 billion dividend for 2025 , maintaining payouts to the government despite a moderation in earnings . Earnings Ease After Strong Prior Year BNM reported net profit of RM12.45 billion in FY2025 , down 5.7% YoY from RM13.16 billion. The decline was driven by: Lower total income (RM14.35 billion vs RM14.98 billion) Costs related to reserve management and monetary operations Despite softer earnings, the central bank sustained its second consecutive RM5 billion dividend , following a record RM5.25 billion payout in 2024 . Strong Reserves Provide Stability A significant portion of profits — RM7.45 billion — was allocated to the risk reserve , which rose to RM155.31 billion . This reserve acts as a financial buffer against: Exchange rate volatility Global financial market fluctuations BNM highlighted that 85% of its assets are denominated in foreign currencies , re...
Last week, we met with Berjaya Auto (BAuto)’s Director, Dato’ Francis Lee and also visited Inokom Corporation (Inokom) in Kulim, Kedah. Inokom is the contract manufacturer of various marques including Mazda vehicles. Currently, BAuto owned 29%-stake in Inokom. At Inokom, we were taken on a tour around the assembly facilities of Mazda vehicles. Key takeaways from the meeting are (i) opportunity to improve export market, and (ii) more room for growth in the Philippines market in the medium term. However, we cut our FY16-17 earnings forecast by 3%-6% due to the revision in our assumption for JPY currency rates. Nevertheless, we are still positive on BAuto as we believe it should perform better than its peers in terms of earnings growth due to a more superior margin, stable dividend payout and net cash position. Our Outperform call on BAuto is maintained at a revised target price of RM2.58 (previously RM2.65) pegged to 13x FY17F.
- Opportunity to improve export market. Since June 2013, Mazda Malaysia (MMSB) has been exporting locally assembled CX5 model to Thailand. The target is to export more than half of the production to more overseas markets e.g. Iran, Philippine and Indonesia. Export will improve the economies of scale of CX5. With this >50% exports, yen exposure will be mitigated to a certain extent and help to improve margin. Currently the plant in Inokom is only operating at one working shift, with a production capacity of 20k units but it could do up to 30k units if it operates in two working shifts. We understand that Mazda Japan will invest USD20m in a new Mazda paint shop, which is expected to complete by end of this year. This would allow Mazda Malaysia to increase its production capacity to 40k units. The new paint shop is expected to also produce Mazda’s patented color of soul red and pearl white, which are currently only available for CBU units.
- More room of growth in Philippines market. YTD 9MFY16 sales volume for Philippines was already at 3,500 units, hence we expect the sales volume of FY16F to exceed our expectations of 4,200 units by next quarter. Currently BAuto have 16 third party dealers for the 3S centres. By end of 2016, management expects to have an additional 2 new dealers. We understand that BAuto is in the process of buying a piece of land in Philippines, which is strategically located in between the ports and Metro Manila. The company plans to build a Pre-Delivery Inspection (PDI) and warehouse centre on the 3 hectares land, which might cost them about RM24m-25m. Currently it pays a rental to 3rd parties’ warehouses before distributing the vehicles to the dealers. Hence, it will be wise for them to have its own warehouse centre in the future to accommodate an increasing sales volume.
Source: PublicInvest Research, 25 March 2016
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