Tuesday 10 December 2013

BJAuto: Zoom-Zoom To The Sky

If I had known BJAuto's FY14Q1 results (May13-Jul13) earlier, surely I would have applied for its IPO.

I only knew it after BJAuto released its FY14Q2 financial result last week.

For FY14Q2 (Aug13-Oct13), BJAuto's quarterly revenue and net profit rise 30% and 250% YoY to RM282.4mil and 27.6mil respectively.

BJAuto FY14Q2 FY14Q1 FY13Q4 FY13Q2
Revenue 282.4 428.4
PBT 37.5 36.2
PBT% 13.3 8.5
PAT 27.6 26.1

MAS Rev 635.2

MAS PBT 62.4

PHI Rev 75.7


Total Equity 211.8
Total Assets 425.8
T/Receivables 68.1
Inventories 120.8
Cash 166.5
182.0 52.9

Total Liab 205.1
T/Payables 109.7
ST Borrow 6.4
LT Borrow 0.0

Net CF -15.5

Operation 107.3

Investment -0.1

Financing -122.7


EPS 3.83

NAS 29.42
D/E Ratio Net C
Net C

For 1HFY14, its revenue and net profit rise 65% and 162% to RM710.9mil and RM53.7mil compared to previous FY corresponding period. In the first half of FY2014, its net profit has already surpassed previous full FY figure of RM52mil.

From here, we can work out BJAuto's FY14Q1 result, which is RM428.4mil revenue and RM26.1mil PAT.

Compared to FY14Q1, BJAuto's FY14Q2's revenue drops 34% due to supply issue in Malaysia. However, improved margin & sales mix push its PAT up to beat Q1 marginally.

The overall increase in revenue is due to better sales of CX-5 and Mazda 6, contribution from Philippines which started since Jan13 and much better profit margin. The phenomenal increase in profit is also partly contributed by its associated company MMSB which runs the CKD project starting from Feb13 (PBT RM4.7mil in 1H).

Though car sales in the end of any calendar year is generally slower, but it should be strong in the beginning of the year. So if we annualized 1HFY14 PAT, it will give an estimated FY14 PAT of about RM110mil for BJAuto. With this result, estimated EPS will be 13.7sen (802.8mil shares). 

Since BJAuto is expected to register further growth in 2H14 especially when the 2014 Mazda 3 is launched, I think a target PE ratio of 15x is quite fair. This will give BJAuto a fair value of RM2.05.

At the same time, BJAuto declares its first interim single tier dividend of 1.75sen. 

Another thing noteworthy is that BJAuto has repaid its borrowings by as much as RM140.7mil in 1H14, thus paring down its borrowing substantially from RM126.6mil six months ago (30 Apr 2013) to only RM6.4mil on 31 Oct 2013. Its cash plus bank deposits just fall slightly from RM182mil to RM166.4mil in the same period of time. All these are achieved by using cash from operation even before its IPO in November.

In another words, BJAuto has a very healthy balance sheet indeed, and will be further boosted by RM58mil cash from IPO from FY14Q3 onward.

BJAuto's  IPO price is just 70sen. Just 3 weeks after its listing, its fair value suddenly jumps to RM2. Who the hell is setting the IPO price?

Now the big jump in its share price on its debut day seems to be well justified...

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