Malaysia’s corporate landscape saw a mix of fundraising activities, renewable energy expansion, IPO enthusiasm and balance sheet restructuring dominate headlines, reflecting continued investor appetite for growth and defensive sectors despite broader market caution. Tenaga Advances Renewable Energy Push KL: TENAGA strengthened its renewable energy ambitions after its subsidiary issued RM1.05 billion in Asean Green SRI Sukuk to finance a 500MW solar photovoltaic project in Kedah . The issuance highlights increasing institutional support for green financing and reinforces Tenaga’s long-term transition towards cleaner energy infrastructure. Investors may view the move positively as ESG-linked investments continue gaining traction across regional markets. Mr DIY Expands Funding Flexibility KL: MRDIY raised RM540 million via its maiden bond issuance , with proceeds earmarked for refinancing, working capital and expansion plans. The ...
Maintain Buy with unchanged Target Price of RM2.40
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| Berjaya Auto Bhd |
We maintain our BUY call for Berjaya Auto due to its:
1. Attractive product pipeline going forward;
2. Aggressive expansion from its Philippines operations, helped by a booming auto market (projected growth of 15% in 2016); and,
3. Strong ability to capture market share (2.4% YTD from 1.5%).
Continuously filling its product pipeline.
We expect Berjaya Auto (BAuto) to maintain an interesting product launch schedule in 2016, mainly from its facelifted models and diesel variants. The face-lift completely knocked down (CKD) CX-5 was recently launched in February, while the CKD CX-3 is anticipated to hit the market by end-2016. As for its “diesel wave”, we believe Mazda 6 would be introduced by mid-year. The diesel CKD CX-5 is also likely to be offered, as the model is already being assembled in Malaysia for the Thailand market.
Strong growth from the Philippines.
The Philippines operations recorded a quarterly sales growth of 41.8% YoY, driven largely by the Mazda 2 and Mazda 3, which saw an increase of volume by 69.3% and 36.4% YoY respectively. The Philippines market would become increasingly significant for BAuto, with industry sales expected to grow 15% to 350,000 units.
Forecasts and risks.
We revised our earnings forecasts for FY16-18 down by 9.4%, 3.7% and 5.0% respectively. Downside risks for our recommendation and TP include: i) unfavourable forex movements, ii) disruption in product pipeline, and iii) lacklustre consumer spending.
Source: RHB Research
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