Bermaz Auto Berhad (KLSE:BAUTO) has long been a recognizable name in Malaysia’s automotive sector, known primarily for its role in distributing and providing after-sales services for acclaimed brands like Mazda and Kia. Listed on Bursa Malaysia since 2013, the company has enjoyed solid brand equity and a stable position in the market. However, recent times have been anything but smooth. A sharp decline in both stock value and financial performances has turned heads among investors, analysts, and market watchers alike. Over the past year, shareholders have suffered a steep loss of nearly 50%, highlighting serious challenges that Bermaz Auto faces in a rapidly evolving automotive landscape. This downturn demands a close examination of the factors behind the company’s woes, its financial health, and the outlook for its future amid intensifying competition.
A primary reason behind Bermaz Auto’s deteriorated performance lies in its significant drop in revenues and earnings reported for fiscal 2025 and the latest quarters. The company’s full-year revenue plummeted by roughly 33%, missing analyst forecasts by 6.4% on revenues and 8.1% on earnings per share (EPS). These numbers reveal pressure on both sales volumes and profit margins—a symptom of fierce competition from Chinese automotive brands that are gaining traction domestically. Bermaz Auto’s core operations with Mazda and Kia have borne the brunt of this encroachment, facing shrinking market share as consumers increasingly consider more affordable or technologically appealing alternatives.
Quarterly financial breakdowns paint an equally grim picture. In the second quarter of fiscal 2025, the company managed a core profit after tax and minority interests (PATAMI) of RM41.9 million, with a six-month cumulative profit hitting RM110.3 million. Yet, even these figures represented only a fraction—about 32% to 37%—of the full-year estimates set by analysts. These underwhelming results are largely attributable to weaker-than-expected vehicle sales and continued margin deterioration. The fourth quarter was particularly disheartening; profits fell short of analyst expectations by about 5%, triggering downward revisions of earnings forecasts by brokerage houses such as CIMB Securities. Projections for EPS between 2025 and 2027 were slashed by as much as 12-24%, suggesting a prolonged period of financial constraints unless strategic changes are made.
Despite the downturn, Bermaz Auto has maintained a dividend payout policy with a recent quarterly dividend of 1.75 sen per share, reflecting an 84% payout ratio. While this demonstrates a commitment to shareholders, sustaining such dividends poses serious questions amid ongoing pressure on profitability. Without stronger earnings, dividend sustainability could become a critical concern, potentially eroding investor confidence further if payout levels are forced to adjust in subsequent quarters.
One cannot overlook the formidable challenge posed by the influx of Chinese automotive brands into Malaysia’s market. These competitors have significantly disrupted Bermaz Auto’s core revenue streams, which is especially evident in the third quarter of fiscal 2025. During this period, core net profit plunged by 40% quarter-on-quarter and a staggering 48% year-on-year. This erosion has contributed to the stock falling to a three-year low and prompted analysts to recalibrate their price targets downward, signaling deep investor unease about the company’s near-term trajectory.
Looking beyond the immediate financial setbacks, Bermaz Auto’s earlier performance in 2024 appeared more promising, with earnings and revenue beating expectations. However, this upward momentum faltered dramatically in 2025, highlighting that structural issues—not just cyclical market fluctuations—may be at play. Industry comparisons reveal that Bermaz Auto is currently lagging behind peers in both revenue growth and EPS trends. This gap underscores the urgent need for management to rethink product strategies and operational efficiencies to halt further erosion and regain competitiveness.
Bermaz Auto’s position as a distributor and after-sales service provider for Mazda and Kia places it squarely in a changing competitive environment. These brands have historically been strong in Malaysia but now face stiff competition from emerging players, many offering innovative features or attractive pricing powered by rapid advances in electric and hybrid technologies. To remain relevant, Bermaz Auto will need to align more closely with evolving consumer tastes—particularly focusing on fuel efficiency and vehicle technology advancements, areas where the green energy revolution is accelerating industry-wide change.
Macroeconomic and regulatory factors also play crucial roles in shaping the company’s outlook. Government policies supporting energy-efficient vehicles and new automotive technologies could either hinder or help Bermaz Auto, depending on how quickly it adapts its product lines and penetrates these growth segments. The company’s ability to innovate and apply flexible market strategies will determine whether these regulatory shifts become opportunities for revival or merely additional hurdles.
In sum, Bermaz Auto Berhad is navigating a notably turbulent period marked by substantial declines in earnings, revenue, and shareholder value. Its challenges stem from a combination of intensified competition—most notably from Chinese brands—soft vehicle sales, and margin pressures that together have triggered analyst downgrades and shaken investor confidence. The dividend payout, although maintained for now, raises concerns about its durability alongside weakening profitability. Looking ahead, the company’s path to recovery hinges on strategic realignment that embraces operational improvements, leverages new automotive trends, and responds adeptly to consumer and regulatory shifts. Observers and investors alike should keep a vigilant eye on upcoming earnings reports and management disclosures to gauge whether Bermaz Auto can shake off this slump and reclaim its foothold in Malaysia’s automotive market.
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