Bermaz Auto gets ‘buy’ call after XPeng deal
Published on: Friday, March 15, 2024
By: Bernama
Bermaz Auto is expected to invest over RM5 million into electric vehicle infrastructure to prepare itself for the move into electrification, said MIDF Research.
PETALING JAYA: Following Bermaz Auto Bhd (BAuto) being awarded the distributorship and rights for the sale of spare parts and provision of after-sales services of China’s XPeng smart electric vehicles (EVs) in Malaysia, MIDF Research has maintained a ‘buy’ call for the automobile distributor at an unchanged target price of RM3.39.
In a statement, MIDF said the awarded distributorship and rights for sale are part of XPeng’s global expansion strategy, which counts Asean and Europe, the Middle East, and Africa (Emea) countries as some of the key regions it is eyeing.
ADVERTISEMENT
“For Asean, the XPeng group has made public its plans to enter the Singapore, Thailand, and Malaysia markets via partnerships with local distributors,” it said.
Meanwhile, MIDF said BAuto is expected to invest more than RM5 million into EV capabilities and infrastructure to prepare itself for the move into electrification.
It said BAuto will initially leverage its existing distribution network given the small volumes expected for now.
“Additionally, ‘minimal’ investment in after-sales is expected as BAuto already has battery electric vehicles (BEV) capability, having launched other BEV models such as the Kia EV6, Kia Niro EV, and Mazda MX30 in recent years.
ADVERTISEMENT
“There is no firm indication of completely knocked down (CKD) plans yet, but we believe this is a possibility given that CKD BEVs are extended excise duty exemption until December 2027,” it said.
As at 2.33pm, BAuto’s share price remained unchanged at RM2.41, giving it a market capitalisation of RM2.81 billion.
ADVERTISEMENT
Stay up-to-date by following Daily Express’s Telegram channel.
Daily Express Malaysia
