RHB maintains ‘promote’ on Tan Chong amid stiff competitors

KUALA LUMPUR: RHB Analysis has maintained its “promote” name on Tan Chong Motor Holdings Bhd regardless of an ongoing restoration within the auto market because it stays comparatively involved over the stiff competitors within the home market atmosphere.

Whereas Tan Chong’s administration expects momentum to proceed into 1HFY22 following the normalization of gross sales and manufacturing in 4QFY21, RHB stays cautious over the home market outlook.

It stated this was owing to the enticing automobile fashions out there from opponents within the mass market phase.

In a report, the analysis agency stated it anticipates that Tan Chong will launch the Nissan Kicks, Nissan X-Path

and Serena in 2022.

Nonetheless, these fashions will come into competitors from the Honda Metropolis, Honda Metropolis Hatchback, Toyota Vios, Toyota Yaris and Proton X50 within the RM80,000 to RM100,000 worth phase.

However, Tan Chong’s Malaysia operations is anticipated to leverage the prolonged gross sales and repair tax exemption measures till mid-2022.

In the meantime, Tan Chong’s overseas markets additionally skilled a restoration in gross sales in 4QFY21, with normalization anticipated to proceed within the coming quarters.

“Beforehand, administration talked about that they’re exploring alternatives with third events for the potential utilization of its Danang plant, of which we are able to solely anticipate a conclusion in the direction of end-2022/early 2023,” stated RHB.

The analysis agency maintained its goal worth at RM1 with an unchanged 10 occasions price-earnings tagged to FY23 earnings.


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